Merged: The Price of Oil
Given the obvious importance of oil as an productive input in the airline industry, i am wondering where industry professionals think the price of oil is going....
Current factors seem to include:
- limited short term ability to increase supply
- limited short term ability to reduce demand
- long term development of technologies to increase efficiency and also switch to alternatives
- OPEC preparedness to defend the $60/barrrel with cuts to production
- China building huge storage facilities with a view to accumulating strategic reserves equivalent to 1 month consumption
- global inventories of only a few days consumption
- rapidly increasing per capita gdp in China and India especially leading to mass increases in consumer demand
- geo political instability in the middle east
- increasing costs of production and difficulty in extraction
- current seasonal softening in US demand
Long term average oil price is around $30 barrel, highest last 12 months around $100/barrel, currently settling around $60/barrel.
My crystal ball says this is as low as it gets, it will be more than $70 in 6 months $80 in 12 months and back over $100 within 2 years. What do you reckon???