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why are oil prices falling?

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asked Nov 13, 2018 11:27 PM by
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what's your opinion on oil? will it ever come back

thanks Chris

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answered Nov 19, 2018 10:40 AM by
Jin Won Choi gravatar image Administrator

Couple of reasons. First, Trump granted waivers on Iranian sanctions. Second, agencies are reporting that US oil production has grown very strongly over the past year.

People have floated around the idea of an oil price 'shale band' these last few years. If prices go too low, shale producers cut back on drilling until prices rise again. If prices go too high, shale producers overproduce until prices go down again.

It looks like the shale band is real. But now that prices have come down to the lower limit of that band, I expect shale producers to cut back and allow oil prices to rise again. But some would make the case that oil can't stay above $70/barrel for too long, and I'm inclined to agree with that.

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Asked: Nov 13, 2018 11:27 PM

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