Oil prices have a volatile history. So don’t count on them staying extraordinarily low for much longer.
Mostly, though, don’t count on the predictions of oil-market experts.
The Wall Street Journal recently reported: “The failure of Wall Street analysts to foresee the depth of the oil decline stands as a cautionary tale for investors reassessing the sector after crude’s 19 percent rise over four sessions.”
The price has fluctuated since then, falling slightly Friday to cap its first weekly decline in a month.
Meanwhile, though, gas prices have started to climb. And debate continues over the impacts of shifting currency values, Saudi Arabia’s increased oil production and other high-stakes factors.
At least there’s no disputing that the huge drop in oil costs over the last seven months is a positive economic force, right?
For instance, it’s derailed many fracking and shale oil operations in North America.
Also from the Journal: “Falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth. China has raised fuel-consumption taxes by 50 percent since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether.”
Still, numerous big-time financial gurus, including the folks at the International Monetary Fund, cite the oil-price fall as powerful fuel for an upward U.S. economy.
However, before joining the giddy crowds who bought gas guzzlers because regular went below two bucks a gallon, keep in mind the heavy odds against it staying anywhere near there for nearly as long as you plan to own your next motor vehicle.
And before trying your own hand at wheeling and dealing in the oil market, keep in mind that even those esteemed analysts can’t seem to get a handle on the slippery slides in oil prices.