As to the futures the soon-to-be-gone April contracts are down $1.19 at $42.27 while the May's are at $44.24 down 95 cents.
We're looking for the May's to trade under $40.00 barring Acts of God or Man that would curtail supply.
From Barron's Read This Spike That column:
Is Oil in a Free Fall?
Publications look at the latest downturn in crude oil prices. And there’s more bad news for active fund management.
For a while it looked like the price of oil might be firming up after declining for much of last year. But that’s apparently not the case. The latest data about growing U.S. stockpiles have taken the price of light sweet crude down to below $44 a barrel — a six-year low.
And Fortune has weighed in with the seven signs that oil “will tank a lot more.”
I’m always dubious about articles that state only the reasons for or against something. Such is the state of online journalism, where nuance is out and a simple polemic seems to score best with readers who presumably have less time than ever to digest a typical article.
Obviously, there are reasons why oil prices could rise, including a sudden drop in supply because of a Mideast blowup.
But unfortunately for oil producers, the Fortune article, with its facile arguments, will probably prove to be right. (I should add that Barron’s Economics Editor Gene Epstein thinks oil could fall a lot further.)The piece points out that the supply glut will only grow while demand will be weak. “Oil consumption is closely correlated to economic growth. Globally, economic growth is faltering — it is slowing in China, negative in Japan, flattish in Europe, and likely to slow in the United States this year,” writes the article’s two freelance authors, Daryl Jones and Ben Ryan of Hedgeye Risk Management, a Web-based financial media company. “The outlook for global demand for oil suggests that it will hit a 12-year low in 2017 — more than 600,000 barrels less than OPEC forecast a year ago for 2017 demand.”
The piece points out that oil-dependent nations have no choice but to produce, which in turn adds to supply and puts downward pressure on pricing....MORE
