Friday, May 13, 2016

The Economist predicted oil crash

"As oil begins to pool in the Gulf, a gap has opened between the prices of LLS and Brent (see chart), even as LLS and WTI have moved into alignment. The discrepancy in prices between the middle of America and the East and West coasts will persist until someone works out a way to move the stuff around in greater quantities. But even if that happens, in a couple of years the whole country will have more light, sweet crude than it needs. If the oil continues to back up, prices will fall further compared with global markets, threatening production from high-cost shale beds and perhaps even smothering America’s resuscitation as an oil power."

From The Economist article "Spreading disarray" on Dec 14th, 2013 here.

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