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Page added on March 19, 2015
Crude oil prices could go as low at $35 per barrel
Crude oil prices took a roller coaster ride dipping down to a six-year low of $42.17 per barrel before bouncing back up and closing the day at $44.66 per barrel.
But one expert on the Eagle Ford shale said conditions are ripe for oil prices to drop even further before they can climb back up and stabilize.
University of Texas at San Antonio Economics Professor Thomas Tunstall said the price drop is due to a glut in global oil supplies, lower global demand and record high inventory.
The United States is producing high levels of crude from its shale oil fields, including the Eagle Ford region just south of San Antonio.
U.S. Energy Information Agency released a Wednesday morning report revealing that oil inventories are at record high levels in the United States.
Commercial crude oil inventories in the United States increased by 9.6 million barrels from the previous week, the report states.
At 458.5 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years.
Although the active rig count has fallen and oil prices are low, production from existing wells in the United States remains high.
Tunstall said it may take up to a year before production and demand can create an equilibrium.
In the meantime, Tunstall said the conditions are right for crude oil to drop to as low as $35 per barrel before they can rise again.
Tunstall said companies in the Eagle Ford are continuing their operations but feeling the sting of lower prices.
“Down in the Eagle Ford, the restaurants are still packed but now, you can get a seat, before you had to wait,” Tunstall said.
| San Antonio Business Journal |
11 Comments on "Crude oil prices could go as low at $35 per barrel"
Plantagenet on Thu, 19th Mar 2015 7:24 pm
The oil glut is still building in the US. Yes, oil could get down into the $30s before too long.
Makati1 on Thu, 19th Mar 2015 8:18 pm
I hope it makes it to the $20s or lower. I am enjoying a much cheaper flight to the States because of today’s oil prices. ($1,197.10 RT) The price of jeepney, taxi and bus travel is regulated by fuel prices and the cost has dropped 20% here.
The lower it goes and the longer it stays there, the quicker the whole system will collapse. That is a good thing, for the rest of the world.
Ted Wilson on Thu, 19th Mar 2015 9:10 pm
How long will it stay at this low prices. Back when the prices were at $100/barrel, OPEC was planning to increase it to $130/barrel.
So don’t expect it to stay so low for long.
Plantagenet on Thu, 19th Mar 2015 11:01 pm
Mak! You are coming to the USA?
Why aren’t you going to North Korea or Iran or some other country that you like more than the USA?
dolanbaker on Fri, 20th Mar 2015 1:49 am
These low oil prices are largely a US phenomenon, the world price is something like 20% higher at the moment and the cost of oil in many other currencies is significantly higher now than it was a few weeks ago. The price of petrol at the pumps in Ireland has risen from a low of €1.19 (per litre) in January to €1.35 this week. It maxed out at €1.70 three years ago when the world price hit $130 a barrel, if crude prices revert to anything like that price the cost will easily exceed €2 per litre.
Makati1 on Fri, 20th Mar 2015 6:06 am
Plantagenet, I do not like the places you mentioned. They are too much like the UFSA, but I have an 89 y.o. mother in the States and I will visit her until I cannot. I do not like visiting the States, but it is a son’s duty. She is unable to visit me, or she would.
I do go to Hong Kong occasionally, for a day, as it is only a short flight and I can go for less than 100USD round trip. I’ve been to Dubai twice but the ME holds no interest. I would love to visit Egypt, but, thanks to the US gov, it is not a safe place for Americans.
Kenz300 on Fri, 20th Mar 2015 6:48 am
At what price will Canadian oil sands become unprofitable?
When will cut backs or bankruptcies begin?
Is there any reason to build the Keystone pipeline?
BobInget on Fri, 20th Mar 2015 11:02 am
Did anyone notice? Netanyahu was reelected.
IOW’s, Israelis voted not for peace but continued
ME conflict.
I’m not sure where these fa cocta authors get their data, probably, from each other. Demand, in actual numbers, is higher then last year.
In some countries, due to conflict, soaring dollar,
the RATE of increase is lower then last year.
Take the two biggies; China and India, both show
increases in ACTUAL consumption.
http://www.opec.org/opec_web/static_files_project/media/downloads/publications/MOMR_February_2015.pdf
The ONLY place where “too much oil” is accumulating is in the USA. Note price differential
between BRENT and Texas light (CL).
http://ir.eia.gov/wpsr/wpsrsummary.pdf
Northwest Resident on Fri, 20th Mar 2015 11:15 am
BobInget — I’m not so sure that oil glut is just in the USA. I’ve read several articles that “claim” the oil glut is filling up storage facilities around the world. Whether that is actually true or not is anybody’s guess. I’m a big believer in the concept of a coordinated mass media owned and operated by a very few megacorps, which are themselves owned by even fewer financial/power elites, and I do not doubt their ability to drive false information packaged as propaganda through thousands of media channels daily. But still, I begin to wonder if that oil glut is just isolated to America. Here’s a writer I tend to respect more often than not, and he seems to think the glut is piling up worldwide:
Mind The Global Oil Glut—–Its Historically Huge And Deepening Daily
http://davidstockmanscontracorner.com/mind-the-global-oil-glut-its-historically-huge-and-deepening-daily/
BobInget on Fri, 20th Mar 2015 11:40 am
If your looking for facts instead of opinions,
here’s a few words of ‘wisdom’ that are moving US oil markets this morning;
“We can’t wait any longer, it’s time to bomb Iran”.
http://www.huffingtonpost.com/2015/03/20/louie-gohmert-iran_n_6909112.html
“Stop the EPA”!
http://www.salon.com/2015/03/20/mcconnell_is_now_directly_telling_states_to_undermine_climate_action/
Our two ‘great’ ME allies;
https://consortiumnews.com/2015/02/25/saudis-said-to-aid-israeli-plan-to-bomb-iran/
Nearly half of American’s think we should bomb
Iran;
http://www.csmonitor.com/USA/Foreign-Policy/2012/0209/Bomb-Iran-Nearly-half-of-Americans-say-yes-to-halt-nuclear-program
http://www.salon.com/2015/03/14/ticking_bombs_iran_the_gop_and_israel%E2%80%99s_secret_plan_for_self_destruction/
Posted note:
Warning to American (Conservative) Jews.
I you truly believe anything good will come from
Israel hooking up with ‘The Christian Right’ and
Saudi Arabia, you are in a ‘house of more pain’.
Speculawyer on Fri, 20th Mar 2015 7:35 pm
$35? Possible but not likely. But the market sure can be irrational. Perhaps that story about storage capacity will have legs and the market will panic.