theluckycountry wrote:Well you're starting from the contango, so it doesn't really apply does it.
Of course it applies. You can't cherry pick which price data you look at. We have to live in the real world, and the oil bust in 2020 is the logical place to start when looking at the most recent OIL BUST to OIL BOOM to OIL BUST CYCLE.
Oil (like most commodities) goes through boom and bust cycles over and over again. If you're going to invest in oil or oil stocks, then investing during an oil price "bust" is the logical thing to do. The last bust in oil prices happened in March 2020 and occurred when oil demand plummeted and oil prices plummeted.
theluckycountry wrote:
That plunging price situation with oil was due to the lockdowns was it not? A totally unheard of event.
Totally unheard of events happen all the time. For instance, who ever expected Putin to turn into ADOLPH PUTIN and try to conquer Ukraine? Totally unheard of, right?
who ever expected Putin to turn into ADOLPH PUTIN and try to conquer Ukraine? Totally unexpected, right?Economists even have a name for these totally unexpected and unheard of events. They call them "Black Swans." Because most swans are white, but every so often there is a black swan and you can't just ignore the black swan economic events in your economic analysis.
theluckycountry wrote:
Oil will go up and down in the future of course, it's a market and there is always going to be fluctuations, but I think it's fair to say the average price (under normal non-covid situations) will rise and rise going forward. It's energy, irreplaceable energy really. Take it out of the equation and try making solar panels and Lipo batteries anyone can afford. They "say" it can be done, but it never has been
Of course that is true when you take a decades-long view, but on the time scale humans actually operate on......a scale of months to years.......oil has always had boom and bust cycles and most likely it will continue to have boom and bust cycles. The last bust in oil prices was in 2020, and now just two years later we are in an oil price boom.
Since we are in an oil price BOOM right now its logical to ask how long will the current oil price boom last?
Well, you know the old saying...predictions are very difficult, especially about the future.
My guess is the current oil price boom will last from 6 months to two years in duration. As soon as the Biden effects works its magic on the US economy and we go into recession, we'll have job losses and there will be less fuel demand. Similar recessions will occur in the EU and perhaps in other countries. The drop in oil demand will cause an eventual drop in oil prices.....and we will have seen yet another another BOOM-BUST oil price cycle in the oil Biz, this going from the bust in 2020 to the boom in 2022 to a future bust perhaps in 2023 or 2024? Thats assuming no BLACK SWAN events happen to interrupt the normal BOOM-BUST cycle in oil prices going forward.
Cheers!