Morgan Stanley believes the bottom is $20/barrel.
RBS thinks $16/barrel.
Standard Chartered believes it's going down to $10/barrel.
A glut of crude may keep oil prices low for the next 15 years, according to Goldman Sachs Group Inc.

mazeltov:
I don't have problem with this news. We all know that one day, the sanctions against Iran would be lifted. Of course the sanction can't everlasting as some people think.
My concerns focus on the weakling 'OPEC' organisation.
Honestly since the creation of Opec, I am yet to see its usefulness to the global oil market. I thought Opec would serve as a regulator to regulate these gluts. Sometimes we need to leave the players and blame the coach.
Opec is just too weak to control the output of crude oil into the global market. At least, Opec should be strong enough to impose sanctions on some giant countries like United States or even Venezuela if they outstep their production.

United States for OPEC? How will OPEC do dat? The only meaningful solution is assigning new reduced quota to member states, that will reduce the oil glut.

omenka:
@bold: I don't think so. It is common knowledge that in every foreign trip the president has made to the West, and currently, Middle East, meeting with business men/community has always been a significant part of his itinerary. The outcome of these won't manifest overnight, but surely, with time, we'd see the influx of foreign businesses as testament to the president's diplomatic shuttles so far.

A little patience is all we need.

the foreign investors are not coming in to invest in Nigeria unless the naira is officially devalued.197naira is not the real global value of a dollar.

omenka:
You have a point but are you aware oil producing states that are non-member states of OPEC account for over 60% of world oil production? This means that even if OPEC seals off all its wells, over 60% of world's demand for oil could still be met!

The only way they might have exerted the leverage you imagine is if they have had monopoly of if they were responsible for an overwhelming fraction of world's total oil output. But they don't, hence, their weakness and inability to regulate supply, and by extension, price.

Furthermore, if they have had that sort of influence and used it as you propose, that could have even more dire consequences for countries that depend on oil exports for forex. Such arm twisting techniques could push big consumers to develop alternatives (they have the technological know how to do so) to oil, thereby ultimately rendering the "liquid gold" useless!

I believe there are some benefits to being a member of OPEC, but right now, in the light of the prevailing circumstances, those advantages nearly totally insignificant.

like my lecturer would say, you have a sound argument!

ladyF:
The oil price would certainly come back up, it's not the first time we are seeing a nosedive like this. World supply is getting shortened as some production facilities have been shut. It's only a matter of time before the market would start experiencing an undersupply that will drive the prices up eventually. Simple economics!!!!

[size=15pt]LadyF[/size] is here again

simple economics whr the forces of demand and supply are not dependent on anyone, but in this scenario the forces of demand and supply is controlled and determined by well known forces who act for their interest. I wish the price will keep falling until the govt bcoms so bankrupt and unable to meet up with its daily duties thereby leading to mass revolution and maiming of the ruling class that has kept us in bondage since 1960.

I just pity Nigeria....

ladyF:
The oil price would certainly come back up, it's not the first time we are seeing a nosedive like this. World supply is getting shortened as some production facilities have been shut. It's only a matter of time before the market would start experiencing an undersupply that will drive the prices up eventually. Simple economics!!!!

[size=15pt]LadyF[/size] is here again

if only OPEC is a monopoly then the prayer for undersupply would be helpful. I bet you, world powers will rather seek for cheap alternative means of energy than allow the price of oil go up again. The political-econmics of oil is more than meets the eye. A reduced price of oil also means a reduced income for world terrorist groups. So many things are into play in the current price u see.

galadima77:


No thanks to those pot bellied governors that won't allow the previous administration save our excess crude earnings! Sad...

the true question is, was the govt sincerely ready to save? What beneficial purpose was that accrued to the FG used for? GEJ really plunged Nigeria into economic hopelessness.

Kikero112:


Exactly.

Anytime i hear someone sing ''Agric will save us''....I always get the feeling the chap is still in the 1960's....when we had guaranteed markets.Not anymore.

And then there are the African countries that do rely on agric...most of them are heavily reliant on loans to fund their budgets.

And your point about modernisation?....Fully taken. Anyone who thinks we can be a major agric exporter on the backs of subsistence farming..with 10% of our farming done on not so modern mega farms is just dreaming.

like seriously, all living past leaders of Nigeria need stoning to death for putting us in this economic lacuna.

Diversification is not a short term thing. Importation should be stopped. This is the only way through this. As someone said, OPEC is too weak to control anything. Weaker than I thought. The western countries aren't complaining much. I don't see a rise anytime soon.

omenka:
Very bad news for oil dependent economies, worst of all Nigeria since we refused to save enough to use as buffers under such a situation.

Now Iran would flood the IOM with its crude driving oil prices even lower- I foresee it dipping below $10pb.

it can't go below $10 cos cost of production from shale is higher than sweet crude. and in case of further dive american oil companies will be the 1st to shut down there oil facilities due to high labour and overhead.

franciskaine:
United States for OPEC? How will OPEC do dat? The only meaningful solution is assigning new reduced quota to member states, that will reduce the oil glut.

no OPEC members want to accept lower quotas

WinningSun:

no OPEC members want to accept lower quotas

others are ready except Saudi and its ally. OPEC is Saudi and Saudi is OPEC.

franciskaine:
simple economics whr the forces of demand and supply are not dependent on anyone, but in this scenario the forces of demand and supply is controlled and determined by well known forces who act for their interest. I wish the price will keep falling until the govt bcoms so bankrupt and unable to meet up with its daily duties thereby leading to mass revolution and maiming of the ruling class that has kept us in bondage since 1960.

The ruling class will escape and it is the middle class who will get shafted.
A microcosm of this played out during occupy Nigeria around lekki.

I'm aa bit confused. If Oil price nose-ddive to $20 per barrel, and its already afact that the cost of producing 1barrel of oil in Nigeria is $31, what's the point producing?

U produce $31 , sell at $20 per barrel? Even to a local market woman, that's losing $9....my question is why should we continue producing when its obvious we are losing?

poseidon12:

Shake oil is not an alternative to crude oil. Shale oil is also crude oil. Shale just refers to the new technology they are using to extract more crude oil which is different from the conventional drilling method.

please educate me, i thought US does not have oil? what are you people now talking about? secondly,if they have oil why are they not part of OPEC?

mazeltov:
I don't have problem with this news. We all know that one day, the sanctions against Iran would be lifted. Of course the sanction can't everlasting as some people think.
My concerns focus on the weakling 'OPEC' organisation.
Honestly since the creation of Opec, I am yet to see its usefulness to the global oil market. I thought Opec would serve as a regulator to regulate these gluts. Sometimes we need to leave the players and blame the coach.
Opec is just too weak to control the output of crude oil into the global market. At least, Opec should be strong enough to impose sanctions on some giant countries like United States or even Venezuela if they outstep their production.

US is not an OPEC member, so OPEC can sanction them, there are only 12 OPEC member states.

Plus, even if US were a member, OPEC wouldn't still be able to sanction them period! Look at every global body body that the US belong to e.g. UN, NATO, World Bank, etc; US policy dominates all of them, the same would had happen to OPEC if US were a member.

Also, artificially controlling demands in order to hike prices does not work in a global economy, ask the CBN Govornoe that is now essentially rolling back all his restrictions on the dollar. People will simply go else where, if OPEC restrict supplies other oil producing states other of OPEC will ramp up supply in other to take in the extra Forex and OPEC will loose long time buyers to the competition.

Omotaday:
please educate me, i thought US does not have oil? what are you people now talking about? secondly,if they have oil why are they not part of OPEC?

OPEC is a voluntary organization, just like the rotary club in any University in Nigeria and currently have only 12 member states, so there are many other oil producing countries that are not members of OPEC.

Chukzyfcb:
I'm aa bit confused. If Oil price nose-ddive to $20 per barrel, and its already afact that the cost of producing 1barrel of oil in Nigeria is $31, what's the point producing?

U produce $31 , sell at $20 per barrel? Even to a local market woman, that's losing $9....my question is why should we continue producing when its obvious we are losing?

Most government policies are implemented not to turn profit, majority of them are done to keep the economy going and to maintain peace and order e.g. The Nigeria Police does not turn profit for the federal government, but it is a necessary institution to maintain order in the larger society.

If the government stop producing oil because, it no longer can turn profit, imagine thousands of people who will be jobless and the cascading effects to the larger society. Imagine the decay that will start taking hold in all oil infrastructures around the country, which will cost more, should we try to restart their use in the future. Imagine the amount of money that will be sucked out the economy and society. Also if we stop producing oil, what happen to the array of oil derivative products that our daily lives have come to unconsciously depend upon with no sustainable alternatives?

I can go on and on, but I believe that, you get the drift.

omenka:
Very bad news for oil dependent economies, worst of all Nigeria since we refused to save enough to use as buffers under such a situation.

Now Iran would flood the IOM with its crude driving oil prices even lower- I foresee it dipping below $10pb.

Of what use is one's huge savings account, when his/her family is starving to death?

Our problem is corruption and mismanagement.

And to think that more countries (Canada and Russia) in addition to US, have discovered shale oil spells more doom to Nigeria

linearity:


OPEC is a voluntary organization, just like the rotary club in any University in Nigeria and currently have only 12 member states, so there are many other oil producing countries that are not members of OPEC.

is US an oil producer/exporter?

Omotaday:
is US an oil producer/exporter?

They have not started exporting yet, they are just producing a little above average demand for domestic consumption.

poseidon12:

Shake oil is not an alternative to crude oil. Shale oil is also crude oil. Shale just refers to the new technology they are using to extract more crude oil which is different from the conventional drilling method.

Bro, shale oil is not a technology. Shale oil refers to a particular crude oil that's found trapped in a shale rock instead of high seas. It requires a special kind of technology to extract it unlike the convectional drilling method. The technology is only used in USA for now, Russia and Canada have been negotiating with America to share the technology but they have not agreed yet.

saxywale:

you are right. I watched on CNN yesterday that the US now has more workers in the solar energy industry than the oil industry.

And the death knell for the oil industry would be technological improvements and mass production of electric vehicles. If the auto manufacturers design portable electric car chargers, and cars that run on 100 miles per charge.

SimonPeters2020:
And to think that more countries (Canada and Russia) in addition to US, have discovered shale oil spells more doom to Nigeria

$15 per barrel could be the reality in a few months time

Oil price cannot fall below it's production rate, which is at an average of $15 dollars. Except we all want our cars and planes to be parked and hung permanently. Even electricity relies on oil, though other means still exist. Oil and gas will bounce back. But my advise to Federal government is to invest in agriculture, technology, mining etc

/
Oil is in the last leg down.

I will start building bullish positions soon.

I used to be sad profiting from others' misery..Then again, that's the hallmark of capitalism.

/

CFCman:

$15 per barrel could be the reality in a few months time

The plan is to benchmark it at $10 per barrel and it's already reflecting on the price of petrol (gas) in US. How much do you buy gas at your end? I just bought $1.77 per gallon this evening, so cool uh?

SimonPeters2020:
The plan is to benchmark it at $10 per barrel and it's already reflecting on the price of petrol (gas) in US.

Right. Here, the average price of gas is around $2.60/gallon. We've been buying gas for under $3 for more than 3 months now.

CFCman:

Right. Here, the average price of gas is around $2.60/gallon. We've been buying gas for under $3 for more than 3 months now.

I just bought $1.77 per gallon this evening, so cool uh?