How low is low? The price of crude is half of what it was only a few months ago. While consumers welcome cheaper energy costs, the oil industry faces bleak prospects. What is driving the oil price and what are the wider implications for the global economy?
CrossTalking with Yaroslav Lissovolik, Jasper Lawler and Steve Hanke.
Courtesy of RT; Source: YouTube
ETFs: USO
Three points that was missing in the video. 1.Many oil companies hedge their production at higher than current market prices. They will continue to produce because they have a guaranteed buyer. 2. Buyers that have future oil contracts can short the oil market to help off set paying higher prices later. 3.Hedge funds and big banks can also short the oil market driving prices even lower.
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Posted by ricodilello | January 10, 2015, 8:18 pmVery good comments. Thank you for your contribution.
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Posted by ETFalpha | January 10, 2015, 8:22 pm