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Oil prices plunged into threshold 10USD/tank no longer distance

Oil prices fell under 30 USD/tank on 12 January and continue falling down around this level on early morning 14 January. Is $ 10 oil tank is forecast fiction or is floored to the "Black gold"?

According to CNN and Bloomberg, oil prices to below USD 30 /tank on the first 12 January since December 2003 and again have broken down on early morning 14 January. Oil prices have lost 72% in 18 months.

Previously, very few companies on Wall Street predict global oversupply story will push prices lower. In 2008, the bank Goldman Sachs once said the shortage of crude oil will cause commodity prices jumped to $ 200 /tank. But the fact the complete opposite.

During this week, Morgan Stanley said super strong US dollar may push oil prices of 20 USD/tank. Royal Bank of Scotland said the 16 USD /tank imminent and compare current market mood to the day before when the Lehman Brothers bankruptcy in 2008.

Standard Chartered does not think these forecasts are bleak enough. Bank of England wrote in a new report that prices "black gold" can slide down to 10 USD /tank, prices not seen since May 11.2001. Meanwhile, averaged gasoline prices in the US dropped $ 1.12/gallon. In recent weeks, US drivers have been happy with gas prices below $ 2/gallon.

Standard Chartered Bank said floor under oil prices can only be established when the entire market agree that prices have fallen too deeply. They also argue that plunging prices caused by bad market sentiment, not because of fundamentals. Oil prices are now cheap enough to balance the market in 2016 by making the Organization of Petroleum Exporting Countries (OPEC), the United States and other oil-producing countries to cut production.

However, crude oil is still difficult to return to a higher rate as before. Not only has the excess supply situation, concerns surrounding the Chinese economy are also a problem as it meant that the energy needs of this country decreased.

Including geopolitical factors are not enough to boost oil prices. Recent tensions in the relationship with Saudi Arabia and Iran seem to only reinforce the idea that OPEC still very unstable to reach an agreement to reduce output, stabilize prices.

 

Despite the negative forecasts and positive, most analysts said the price of crude oil will increase in the future. Many reviews predict oil will rise to $ 50/tank in December 7. Standard Chartered Bank is more optimistic with forecasts given figure of 65 USD /tank.

 

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