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Oil Prices

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Get Ready for the Cheapest Memorial Day Gas Prices in Over 10 Years

oil

We're about to see the cheapest gas prices in over a decade this Memorial Day weekend.

In fact, the whole summer could see us saving at the pump...

How Crude Oil's New "Floor" Sets You Up for Big Gains

crude oil

The anxious pundits on TV worried about crude oil surpassing $50 are missing a crucial point.

Oil's price floor is the key to profits - and crude's just established a new one. Here's where - plus what it means for your money...

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% […]

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Warning: Don't Trust Goldman (Especially on Oil Prices)

crude oil prices

Goldman Sachs recently released a mildly bullish report on oil prices - an interesting reversal of the firm's prior bearish stance on crude.

And there are two key reasons why you should take Goldman's revised position with a grain of salt...

Why the WTI Crude Oil Price Is Up Today

wti crude oil price

The WTI crude oil price today (Monday, May 16) is on track for its highest close in six months.

The U.S. benchmark jumped more than 3% to $47.68 during midday trading.

And it's all thanks to a surprisingly bullish prediction from this Wall Street bank...

The Price of Crude Oil in 2016 Will Climb Because of These 3 Factors

crude oil price

The price of crude oil has rocketed from its 13-year low in February.

WTI crude oil prices are up 59% to $46 a barrel today.

And there are four factors that ensure the rally will keep going in 2016...

The Secret to Predicting Oil Prices – and Cutting Through the "Expert" Hype

oil prices

These four factors are the secret to accurately predicting oil prices - and cutting through the media's smoke and mirrors.

The second one threatens thousands of jobs here at home, so it's important to take a look at what's really happening with crude...

Crude Oil News: These Companies Just Ditched $2.5 Billion to Avoid Bankruptcy

crude oil news

The biggest crude oil news stories are always movements in day-to-day oil prices.

But the 58% crash in prices over the last two years has forced many firms to make difficult decisions.

That brings us to this important story being overlooked this week...

Crude Oil Prices Today Fall After Saudi Arabia Shakeup

saudi arabia

Crude oil prices fell more than 1% in early-morning trading today.

At 9:45 a.m., WTI prices were down near $44.15, while Brent prices were trading at $44.66.

And it's all due to a massive government shakeup in the world's largest oil country this past weekend...

3 Reasons We Just Raised Our Oil Price Forecast for 2016

oil price forecast

Oil prices have skyrocketed more than 70% over the last three months.

What's even better is that our new oil price forecast sees prices going even higher this year.

And there are three bullish factors that will make it happen...

Why the Price of Crude Oil Is Surging Today

crude oil price

The price of crude oil is close to hitting its highest level of the year.

And there are two ongoing events dominating energy headlines that are sending prices on a rally today.

Here's everything you need to know about crude oil prices today - and where they're heading in 2016...

Forget About Supply and Demand – a New Equilibrium Is Now Setting Oil Prices

oil prices

Oil prices will trade in a narrow range ahead of the June OPEC meeting. But a bigger catalyst, one that has nothing to do with supply or demand, is already rocking the sector.

A new "oil equilibrium" is forming - an entirely new kind of energy investment that will change the industry as we know it. Here's what you need to know...

Crude Oil Prices Today Fall 1.9% After This Bearish Report

crude oil prices today

Crude oil prices today tumbled in morning trading following last month's 20% rally.

Both Brent and WTI oil prices were down 1.9% and 2.5%, respectively.

And it's all thanks to this bearish supply data released by Reuters...

Why I'm Revising My 2016 Crude Oil Price Forecast Now

oil prices

After the failed Doha meeting, doomsayers predicted the price of oil would crater. With WTI rising nearly 20% in April, they couldn't have been more wrong.

Now Dr. Kent Moors is revising his oil price forecast upwards. He says there are three key reasons why...

Why These Oil Price Predictions from Wall Street Are Dead Wrong

oil prices

Many banks on Wall Street have overwhelmingly bearish oil price predictions.

In fact, there's one bank that sees oil prices falling below $30 by the end of the year.

This chart shows where four major banks see prices heading through 2017...