11 December 2014
Oil markets are dangerously rebalancing as prices fall
Cheap oil will be a boon for consumers, but carries long-term risks too
The bonanza years for oil producers are over. The fall in oil prices since the summer shows no sign yet of stopping. Industry veterans talk darkly of a return to the barren years of 1990s or the glut of the 1980s. Pessimism is spreading across the sector. As Petroleum Economist went to press, the front-month Brent contract was selling for around $65 a barrel and WTI for $62/b. Wall Street price forecasts for 2015 are being rewritten daily. The market has further to fall. Prices may not drop as dramatically, or land as low, as they did in the second half of 2008. But there are few indications that once Brent has bottomed, probably sometime next spring, perhaps in the $50s, it will enjoy the k
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