As the price of #oil continues to slide, economists and analysts speculate when the price of ‘black gold’ will bounce back and what is causing the decline in the price.
The general consensus for the reason for the slide in the oil prices is due to oversupply in the market and less demand than usual.
So where has this over supply come from? Well there are a number of reasons, I will list a few:
- #Fracking has increased in recent times, especially in the United States, which used to have to import about 60% of its oil. Now because of Fracking the US now only imports about 30% of its total oil usage.
- #ISIL and the crisis in the Middle East – When ISIL started becoming headline news all over the world, the general fear was that if they controlled regions where oil wells are located the oil supply from Iraq and Syria would dry up. So in a panic everyone bought as much oil as they could, what they failed to realise is that ISIL would need a source of income and oil is as good as it gets. So when ISIL seized oil wells they continued production and sells their oil on the Black market and Turkey.
A couple of months back a colleague of mine (and aspiring trader) sent me a link. I read it, found it an interesting read but more or less dismissed it, until the other day. You can read the link here, I found it on the #BBC website.
The gist of the article is about the Rockefeller Brothers Fund that decided to sell an enormous amount of their fossil fuel investments and invest in alternative energy sources, I thought this was strange and assumed they must know something the most of us don’t.
“Follow the Smart money” this is an important rule in trading, the Smart money will have knowledge and information not readily or easily accessible to the general public, they also have the power to move the markets.
If you have investments in oil, the point of this article is not to scare you into selling. But it might be wise to reassess your portfolio.
Follow @PiDeJongeLabels: BBC, Fracking, IS, ISIL, ISIS, Oil, Rockefeller, Smart Money, US