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Oil Prices

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Why the Oil Price Today Fell Below $44 to Lowest Level in Three Months

oil price today

The crude oil price today fell to its lowest level since April due to the rising dollar and August contract expiration.

But oil prices will keep trading in the $40 range, and this opens up one great investment opportunity.

Here's the best oil ETF to buy in this "range-bound" price environment...

This "Demand Dynamo" Is Where Oil Prices Are Really Set

oil prices

The West may still hog oil finance, but the country driving demand for crude - and oil prices - lies elsewhere.

In fact, this Asian nation is projected to be the fastest-growing consumer of crude through 2040. And no, it's not China...

Why Crude Oil Prices Will Climb in 2016

oil pricesAccording to Money Morning experts, the oil price crash is coming to an end in 2016.

Despite crashing more than 70% since June 2014 highs, a bottom is near. Oil prices will slowly begin to climb again this year.

WTI crude oil prices have hovered near $30 per barrel through 2016 after dropping nearly 40% in 2015. Brent crude oil – priced in London – had an even worse year in 2015, falling 44.2%. In fact, 2015 was the worst year for oil prices since the financial crisis of 2008.

But Money Morning experts expect the price of crude oil to gradually climb by the end of 2016 and through 2017.

Before we get to why crude oil prices will begin rebounding, let's look at why the price of oil fell so dramatically in 2015 and through early 2016…

Why Crude Oil Prices Have Been Crashing in 2015 and 2016

A confluence of bearish factors caused the recent oil price crash.

First, global oil supply has been at an 80-year high throughout 2015 and early 2016. And these supply issues have been exacerbated by new concerns that OPEC will continue adding to the global supply glut.

Then there's demand. The International Energy Agency (IEA) released a bearish report in January 2016 stating that soaring OPEC production will keep yearly global demand growth for oil under 1.2% through the year. Cartel-wide output jumped 280,000 barrels to a total of 32.6 million last month.

"Persistent speculation about a deal between OPEC and leading non-OPEC producers to cut output appears to be just that: speculation," the IEA report stated.

Another reason for the oil price crash is slowing demand in China. China is the world's second-largest oil consumer, behind the United States.

The China demand problem became clear in November when oil imports in China fell by 218,000 barrels per day to 20-month low. Overall demand that month hit 732,000 barrels per day – down 9.9% from the same month in 2014.

A third major reason that crude oil prices have been falling in 2016 is the lifted Iran sanctions.

On Jan. 16, the International Atomic Energy Agency (IAEA) confirmed Iran has scaled back its nuclear research – complying with the terms of the nuclear deal struck last July. The terms included reducing its uranium stockpile to 300 kilos or less and allowing IAEA spot inspections of Iranian nuclear sites.

In exchange for reducing nuclear activity, the UN will lift sanctions that target Iran's defense, shipping, and most importantly, oil industries. The OPEC country will now be allowed to ramp up oil exports, which analysts believe will add up to 500,000 barrels of oil a day to the already oversupplied market.

While those three major incidents have all contributed to a global oil price crash, Money Morning Global Energy Strategist Kent Moors says that oil prices have found a floor. And he sees oil prices climbing through 2016 and 2017. Here's how much…

Expect Crude Oil Prices to Climb in 2016 and 2017

While oversupply and falling demand in China have been major contributors to falling oil prices, Moors points out that global oil demand continues to rise at a steady rate.

The U.S. Energy Information Administration (EIA) expects global consumption to rise from 93.8 million barrels a day last year to 95 million this year. And the agency also expects that number to hit 96.5 million through 2017 – marking a 2.9% increase from 2015.

This long-term demand growth will reduce the worldwide glut and raise prices to the $70 range by next year.

While demand rises, output is also expected to drop this year.

You see, the average oil well produces most of its volume within the first 18 months it is online. The majority of U.S. oil wells are now starting to see a drop off in production. That makes sense considering the oil price crash has been going on for about 18 months.

"The U.S. rig count has declined precipitously… that can't help but lead to a drop in supply, especially when it comes to shale or tight oil," Moors said. "It's called the decline curve and can't be finessed forever."

And there is a third reason to be bullish on crude oil prices in 2016 and 2017…

The current low oil price environment is ushering in a wave of M&A activity that will stabilize the oil sector by making it leaner and more consolidated. This will lower the number of U.S. producers and birth a new group of heavyweight companies that will strengthen prices.

"The specific objective of M&A may vary from deal to deal, but the overall goal remains the same: to streamline participation in advance of sector stabilization and the inevitable rise in raw material prices," Moors said.

In fact, we've already seen the M&A wave with the Shell-BG Group and Schlumberger-Cameron deals…

On April 8, Royal Dutch Shell Plc. (NYSE ADR: RDS.A) acquired BG Group Plc. (OTCMKTS ADR: BRGYY) for $70 billion. The deal is the largest energy merger in more than a decade and will create the world's largest producer of liquefied natural gas.

"The Shell-BG [transaction] is the first clear megamerger option crossing the oil-gas division," Moors noted back in April. "We will see more of these as the new energy balance among a widening number of energy sources kicks in."

The slow and steady price rebound will offer us strong profit opportunities in the meantime.

"We are not racing back to $100 a barrel oil," Moors said in December. "But we certainly do not need triple-digit oil to make some nice investment returns, especially in a sector that has been so oversold."

Stay tuned to Money Morning for everything you need to know about crude oil prices, crude oil price predictions, and how to invest during a low oil price environment…

Why Crude Oil Prices Will Climb in 2016

According to Money Morning experts, the oil price crash is coming to an end in 2016. Despite crashing more than 70% since June 2014 highs, a bottom is near. Oil prices will slowly begin to climb again this year. WTI crude oil prices have hovered near $30 per barrel through 2016 after dropping nearly 40% […]

Read More…

The Easiest Way to Profit from "Range-Bound" Oil

oil

On July 9, I wrote that major industry analysts had made a premature, and therefore dangerous, call to jump back into the "supermajors" - three of which are collectively spending around $45 billion to increase drilling - with both feet.

The thinking there is that these giants are diverse enough to have made it through the oil crash and are in position to capitalize on any price increases.

At the time, I said that any investor who acts on those recommendations will have leapt before looking hard enough.

Now, it looks like I was right. Over the past week or so, oil has become tightly range-bound, moving up and down in roughly equal measure. On July 13, for instance, New York-traded West Texas Intermediate (WTI) crude dropped 4.4%... after rising 4.6% the day before.

You could play those prices... if you were a professional futures trader. But for regular investors, that would be a hard dollar, indeed.

So let me show you the simplest, most profitable way to make money on oil in these narrow ranges...

What Nobody Gets About the "Oil Glut"

oil

Pundits are once again using the oil supply glut to justify their forecasts for lower near-term oil prices.

But Dr. Kent Moors is sticking to his $50 a barrel price in the short term. Here's why, plus what everyone else is missing...

Why the WTI Crude Oil Price Today Is Up from Two-Month Lows

7 8 16 wti crude oil price

The West Texas Intermediate (WTI) crude oil price today jumped nearly 2% following yesterday's two-month low.

And there's one primary reason why oil prices are rebounding right now.

Here's everything you need to know about today's movement...

WTI and Brent Crude Oil Price: 3 Differences Between the Two Benchmarks

crude oil price

The WTI and Brent crude oil price are the two most popular oil reference points in the world.

Still, many investors don't understand the fundamental differences between the two.

Here are three things you need to know that distinguish WTI and Brent crude oil...

Our New WTI Crude Oil Price Prediction Shows Post-Brexit Upside

crude oil price prediction

Both Brent and WTI oil prices have sold off over the last two weeks in the wake of the Brexit vote.

But our new crude oil price prediction shows both benchmarks rebounding this year.

Here are our specific oil price targets for 2016...

What Big Banks Won't Tell You About Their Oil Price "Forecasts"

oil price

Following last week's Brexit outcome, the big banks are now bullish on oil prices - a reversal of their position just a few weeks ago.

Here's why these banking behemoths changed their minds - and why you can never trust their "forecasts"...

Oil Prices Today Rebound 2.7% as Brexit Fears Wane

oil prices today

Oil prices today are pushing higher following last week's Brexit vote.

Both Brent and WTI oil prices fell for three straight sessions following last Thursday's Brexit referendum.

Although there may be more short-term volatility, we see prices hitting these specific targets in 2016...

Oil Prices After Brexit: Where the Market Is Headed Now

oil prices after brexit

Oil Prices After Brexit: Crude oil prices around the world are falling in the wake of the biggest event in British history.

Last night, the UK officially voted to leave the European Union.

Here's why oil prices are reeling from "the biggest single event to jolt markets in decades"...

Where Crude Oil Prices Are Headed After the Brexit Vote

crude oil prices

Crude oil prices tumbled below $50 today ahead of the big Brexit vote tomorrow.

Despite the polls showing most citizens want to stay in the EU, the numbers are often inaccurate due to undecided voters.

That means the oil price action will be exciting tomorrow as the Brexit outcome grows uncertain...

Why the WTI Crude Oil Price Is Falling Today

crude oil price

The WTI crude oil price is down for the fourth straight day.

Prices fell nearly 1% despite a surprisingly bullish report from one of the world's top energy agencies.

But we've outlined five reasons why prices won't stay low for much longer...

WTI Crude Oil Price Falls Today, but This Fund Is Still a Buy

wti crude oil price

Thanks to the rising dollar, the WTI crude oil price today dropped below the $50 mark.

Despite today's short-term drawback, we're recommending one investment that's sure to bring hefty returns this year.

Here's more on one of our best oil recommendations of the year...

Five Reasons Why Today's Oil Price Dip Won't Last

oil price

Crude's impressive trend upwards since February has some predicting a quick spike to $60 per barrel.

That won't happen, but the weakness in the oil price is finally drawing to a close. Here are five reasons why prices will - in fits and starts - keep rising from here...