MONEY MASTER

It may be difficult to believe but as mentioned in my previous post, this is a new era for oil . And the next question to ask is how low can oil prices go?  Well, if the analysts were correct, the oil can still go lower...and it might fall a lot more. OPEC's decision not to cut production was obvious: to put and cause pain to US shale drillers, but it's providing holiday gift for consumers.  OPEC members Thursday followed the lead of Saudi Arabia, which has said it did not want to cut production and has made it clear it will defend its market share against other producers. Those producers include the U.S. shale industry, which has helped boost U.S. production by a million barrels a day in just a year. OPEC member Venezuela sees the world oversupplied by 2 million barrels a day. And if the US oil production were to continue to increase, the oil prices will definitely fall even lower. This is very likely to happen especially over the next three to fo...

It was difficult to imagine that the oil price will be at 70 per barrel 6 months ago but today, the oil price has plunged to $70.15 per barrel.  OPEC's decision not to cut production is indirectly a declaration of price war in the crude market and the challenge to US shale drillers.  Here is a look at why the sharp drop in the oil price. First, US production has nearly doubled in recent years to 9 million barrels a day and analysts expect the production to rise by more than 1 million next year. And like all commodities and trades, an oversupply will drive the prices down. With this supply, Saudi Arabia and OPEC have essentially surrender to the inevitability of the lower prices from the exploding improvement in the US energy production. As OPEC maintained their output target, the oil price plunged to a point where some of the shale projects may lose money. This is a new era, where the market itself will manage supply. Saudi Arabia and OPEC kne...