Oil Explored

So we’ve all been hearing about how oil is supposed to go up.  In fact, I believe this to be somewhat true.  What I also believe is that since we have a surplus of oil anyway, it’ll not be for a while now.

Assuming that we had higher levels of reserves, higher than we had a year or two ago, we should also assume that the prices couldn’t be or shouldn’t be any different than then.  At the time, oil prices were in the mid to high 70’s.  Hence, we should have similar prices, if not lower…which we don’t.

You also have to take season into account.  If you had $70 prices in Winter and you had similar reserves, then the price of oil should be somewhere in the vicinity of $70, yet again.  The reason we are in the high $80’s to low $90’s is because of the weather in the Northeast.  You turn oil into a lot of different things:  gas, heating oil, et cetera.  And since the weather has been kind of drastic up North, there’s actually a demand for these things, hence, higher prices.  As Winter comes to a close; As Spring slowly dissipates; As Summer slowly creeps up on us, we should see those prices rise also.

I predict that for the next few months, we’ll teeter between $85 and $95.  I predict this mainly because there is a surplus of oil (not much but it’s there) and we are slowing heading into Summer.  Weather issues will surely increase the price of oil, especially if they can’t stay ahead of demand.  The predictions for the coming year are vague but clear enough to state that there will be extreme weather patterns.  Assuming that these extremes refer to higher than normal temperatures, then we have to assume that oil prices will rise.  The Summer should see prices above $100, front month.

Good luck.