Steady Price of Crude

As I mentioned in my last post, I don't see oil prices moving to either extreme price predicted by two forecasters a couple months ago.  An article in Bloomberg here provides some support for my view. From the article:

All but one of 15 senior oil traders and executives interviewed this week at the annual Asia-Pacific Petroleum Conference in Singapore expect crude to remain between $40 and $60 a barrel over the next 12 months. Brent crude has traded in that range for the past five months.

The issue, as I've stated, is that commodity markets dominated by investors do not allow prices to fall low enough to generate the shake out needed to balance the market. Prices also tend to rise quickly enticing new production. So-called "savvy" investors are looking to time the bottom and ride the price rise up.  As one trader stated, the issue is that prices go up too fast, and this happens because of the herd mentality of Wall Street.

The current commodity deflation is a consequence of the bubble Wall Street promoted from 2002 to 2012, and most prices will be depressed for a long time because of the over-investment that occurred as a reaction to that bubble.  We consumers are getting some needed relief...