Neil M. Pine, financial analyst for Reliance Management LLC, is once again forecasting oil to eventually plummet to $20 a barrel by 2018!
The Vienna Agreement
It is public knowledge that the OPEC nations, Russia, along with several other countries, have all colluded to try to prop up the price of oil by cutting production. However, it’s just like putting your finger in the dike when a dam springs a leak. “Too little, too late!”
You Can’t Stop the Inevitable!
Trump wants to deregulate US oil production while alternative energy and transportation technology is proliferating to the point where oil may someday become obsolete as a source of fuel. It is only the demagoguery of the oil industries which still keeps us dependent on their antediluvian technology. Also, rouge nations like Iran (Iran has been excluded from this agreement), or radical organizations, such as ISIS, don’t care about production cuts, but then neither does the U.S.!
This deregulation by the Trump administration will motivate U.S. shale oil producers to ramp up production, even at $50 a barrel. Since June of last year, approx. 150 new oil rigs have come on line in the U.S., and it is estimated that about 25 more new rigs will be created monthly during 2017.
Joshua Mohony, market analyst for spread betting firm I.G. states that “A likely rise in U.S. output, in response to higher prices, and an increasing rig count will counteract some of [the production] cut, while the opaque nature of national crude output mean that enforcement will be unreliable at best.”
Russia, while not being a member of OPEC, had also signed this Vienna accord, agreeing to major production cuts. However, just like OPEC, oil analysts are also very skeptical that Russia will abide by this agreement since oil makes up a majority of their revenue.
Upon the announcement of this pact in December of 2016, between certain oil producing nations, oil took an immediate pop from about $43 to over $50, and all of a sudden, the pundits and so called “industry experts,” were touting $60-70 oil. However, since this initial knee jerk reaction, oil’s performance has been lethargic at best. Currently $52.43 as of 1/11/17.
Oil and gas are dirty old fashioned technologies. While our great grandfathers’ were putting ice in an ice box, before refrigeration, There was something else they were doing that we still do today, and that was to put gas in their car! There is no long term future for the petroleum industry except for possibly lubrication products and plastics, but then, there are synthetic lubricants and plastics that can be made inexpensively from agricultural materials such as hemp.
Mark Cuban is a smart man, so people should take it as a harbinger of things to come when he shelled out 5 million dollars on his show “Shark Tank,” for N. American distribution rights to an air powered car which (according to auto manufacturer, Ta Ta Motors), has a revolutionary technology that enables this vehicle to travel up to one thousand miles at a speed of up to 90 MPH on nothing more than compressed air!
How much will a barrel of oil be when 50 million people are driving one of these?
In addition, by 2018, electric vehicle technology will become so advanced along with the mass production of vehicles being implemented, to such a scale, that it will become both practical and affordable for everyone! 300 mile ranges will become the standard and prices should dip well below thirty thousand dollars. Even with plummeting fuel prices, electricity is still 40-90% cheaper than using gas. The new Chevy Volt EV can go approx. 250 miles on a single charge and they are selling like hotcakes!
In an article by Phillip Inman, entitled “OPEC doesn’t hold the cards, even after its oil price agreement,” he expounds upon certain critical factors which the Main Stream Media (MSM), seems to be oblivious to. He states, that according to analysts at Societe Generale, “Global, and especially U.S. crude inventories are at extremely high levels after 2 years of massive oversupply. While OPEC is very significant and will result in some moderate stock draws next year, it is likely to take more than one year for crude inventory to return to more normal levels.”
OPEC had hoped to cripple the US fracking industry by holding down prices, thus creating a “production squeeze,” however, to the chagrin of King Salman, Arabia’s budget has been crushed while the U.S. is still positioned to greatly expand production.
This same rationale is also confirmed by analysts from Oxford Economics who state that a general lack of global demand will keep oil below $60. They also bring up an additional factor, not yet mentioned that historically, these countries have demonstrated a propensity to cheat on their agreements. “A history of Opec governments cheating to improve their revenues – by pumping more oil in contravention of production cuts – is also likely to undermine efforts to cut output”—(Oxford Economics)
They go on to say that, cheating aside, the enforcement of the Vienna deal will be critical to any hope of temporarily maintaining the post Vienna price, but as Mr. Pine states “They are doomed for failure!”
Furthermore, Israel has reported the discovery of one of the largest oil reserves in the Middle East which rivals that of Saudi Arabia. They also have not signed this accord. Bottom line, the world just has too much oil!
The elimination of all antediluvian energy technologies (coal, oil, and nuclear), and the development of truly sustainable energy sources (wind, solar and hydroelectric), will someday represent a monumental epoch in the evolution of humanity!—(Neil M. Pine)
So forget all those silly financial TV shows, like the guy with the bald head, with all his props and sound effects along with all the other magazines and publications! If you listened to all those other sources of media for your investment ideas, then you’re probably regretting it now. JetSettingMagazine.com should be your FIRST source for all your investment decisions and we have the articles to PROVE it!
To read more of Mr. Pine’s incredible cutting edge financial forecasts (Exclusive ONLY to Jet Setting Magazine), please refer to the links below.