The invstr community predicts Brent to close at $60 a barrel this week and to end 2015 at $71 a barrel
Today Xi Jinping has cemented his status as China’s most powerful ruler since Mao Zedong, by having his name written into the communist party constitution.
Oil prices have fallen by 30% in the last six months following a peak in the summer months.
|Brent Crude Oil Prices & invstr Predictions ($)|
|01/09/2014||Current||2014 Close||2015 Close|
|Source: price history from IDC, forecasts from invstr community predictions|
Until very recently oil prices were high. This encouraged an increase in supply from traditional producers such as Canada and Russia for whom oil revenues are an important source of income. High oil prices have also encouraged shale oil production in the US, which started in 2003.
Lower oil prices benefit motorists but they hurt the producer. If oil prices stay low for long this will discourage production of oil wells that have a cost above the current level.
The invstr community believes that oil prices will only recover to $71 by end of 2015. This implies that oil production will have to fall further until demand and supply find a new equilibrium. Low oil prices will keep inflation low, raise consumer disposable income and should be good for equity markets.
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