Oil Prices

It’s hard to get a good sense of why the price of oil can vary between $150 and $30 per barrel. There are a lot of factors behind the price, but in the end it all comes down to supply and demand. In this episode we break down how supply and demand have changed to drive down the price… and discuss what might change in the future.

The story gets complicated fast: shale, tar sands, Iran, Russia, the Arctic, China, and hippies all get some airtime. We don’t tell you what to think, but we do help you break it down.

Just note: we’re not financial advisers and this isn’t financial advice.

Sources:

• Brent spot price: https://ycharts.com/indicators/brent_crude_oil_spot_price

• World oil production: http://www.indexmundi.com/energy.aspx?product=oil&graph=production
• Recent world oil production: https://www.iea.org/oilmarketreport/omrpublic/
• US Oil production explosion: http://www.energytrendsinsider.com/2014/07/10/world-sets-new-oil-production-and-consumption-records/
• US Crude reserves going up (after a long decline): https://www.eia.gov/naturalgas/crudeoilreserves/
• Proved reserves going up all over the place: https://en.wikipedia.org/wiki/Oil_reserves
• Most reserves are “unconventional” and have been brought into play only in the past 20 years: https://en.wikipedia.org/wiki/File:Total_World_Oil_Reserves.PNG
• CitiGroup projects that total oil output will keep going up. http://www.smarteranalyst.com/2015/02/18/citigroup-global-oil-output-will-no-doubt-rise-in-the-next-several-years/
• Oil patches in the Arctic Circle: https://en.wikipedia.org/wiki/File:ArcticLocationMap2.png
• Chinese economic growth : http://www.wsj.com/articles/china-economic-growth-slows-to-6-9-on-year-in-2015-1453169398
• Saudi oil war with fracking:– http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-go-broke-before-the-US-oil-industry-buckles.html
  – http://www.forbes.com/sites/jamesconca/2015/07/22/u-s-winning-oil-war-against-saudi-arabia/#39a042867876
• http://www.eia.gov/finance/markets/supply-opec.cfm
• http://marketrealist.com/2015/12/saudi-arabia-increase-oil-production-effect-global-market/
• http://www.ft.com/cms/s/0/8472ecb0-71a4-11e5-9b9e-690fdae72044.html#axzz3zq742FnH
• http://www.ft.com/intl/cms/s/0/219ad9da-6174-11e5-a28b-50226830d644.html#axzz3zq742FnH
• http://marketrealist.com/2015/12/crude-near-break-even-cost-opec-members/
• China
  • http://www.bloombergview.com/articles/2016-01-07/be-scared-of-china-s-debt-not-its-crashing-stocks
  • http://qz.com/175590/five-charts-to-explain-chinas-shadow-banking-system-and-how-it-could-make-a-slowdown-even-uglier/
• http://www.economist.com/news/leaders/21625785-its-debt-will-not-drag-down-world-economy-it-risks-zombifying-countrys-financial

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