Uncertainty Remains the Rule Among Energy Analysts with Regard to the Price of Oil
Oil prices have been low for some time, and that has some investors and analysts feeling nervous. While low petroleum prices tend to support a vast range of economic activity, they can also spell trouble for producers, refiners, and others. A great many extraction projects have already shut down, at least temporarily, in order to weather the low pricing regime that has now been in place for some time. Whether even more of these operations will shutter for some time or fold for good will depend almost entirely on what the price of oil does in the future.
Last year was, therefore, a time of great nervousness for some, with an early crash to previously unthinkable levels suggesting that real troubles might lie ahead. As the price of oil recovered to a more comfortable range, though, some remained worried about such prospects. While petroleum prices have remained fairly steady in staying well above those surprising, short-term lows, some have suggested that a long-term return to that form could be in the offing.
On the other hand, other analysts have been suggesting that it will be higher prices that will most likely wait in the future. Among them, this site has info that describes the various factors that could contribute to renewed price strength, with several of these possibilities reflecting reversals of relatively long-term developments. The aggressive production levels that Saudi Arabia and others have wielded as a cudgel against upstart North American producers, for example, seem already to have accomplished most of the desired work. That could leave these major players once again looking to support the price of petroleum through a renewed commitment to moderated output, a possibility that seems more and more likely.
In the end, only time will tell if one of these extremes or a longer stint in today’s doldrums will characterize the near future. What is just about certain, however, is that few feel entirely comfortable predicting developments to come in the petroleum markets today. While some may have become complacent thanks to the relative stability of recent months, most have adjusted to a reality in which a surprising array of disparate factors combine to determine just how much a barrel of oil will sell for.