The energy market, especially the oil investment market, has been full of peaks and valleys. However, that doesn’t mean this type of investment arena can’t be extremely profitable for people that have the stomach for such a bumpy ride. What is important is a steadfast resolve be successful and the ability to get advice that can help when it comes to predicting where oil prices are going and why they are doing so.
One of the biggest issues when it comes to oil prices is the fact Saudi Arabia has sided with other OPEC members to cut production. In the past, Saudi Arabia, being a major controlling interest in OPEC, has maintained a high level of daily crude oil production. This allowed large surpluses of crude oil around the world, and it helped to keep prices down. This may not seem like it works in the interest of OPEC, but in terms of garnering market share, being the largest provider of oil, even if there is a crude oil glut, helps to protect market share.
However, many other OPEC nations are struggling with economies that are beyond sluggish. Venezuela has experienced shortages of food, and the economy of countries like Nigeria, Algeria, and Liberia are all suffering from economic woes, largely brought on by lower prices for a barrel of oil.
Another element in the price of oil is the fact that U.S. production of oil has greatly diminished. The number of oil rigs currently in operation is down since 2014, and many new oil gathering initiatives, those slated for the Arctic as well as the Gulf of Mexico, have either been delayed indefinitely or canceled entirely. This leads many speculators to believe oil prices per barrel will rise. They don’t believe oil will be reaching $100 a barrel anytime soon, but a rise in the price of a barrel of oil to $65-$70 within the first financial quarter of 2017 is not unrealistic.
Many oil investors and energy investors alike are looking at this as a potential opportunity. The interesting thing is, the oil market can shift dramatically within a few days and, sometimes, even within a few hours. Keeping up with these changes can be difficult, but this industry has a tremendous potential for significant returns on investment if somebody is willing to take the chance.