Oil is Headed to $40.75 a Barrel
by Jeffrey Hirsch, CEO Stock Trader’s Almanac
That is my forecast and like many others predicting where oil (CLF15:NYM) is headed next, I will likely be wrong too.
With a price target of $40.75 per barrel, I’m clearly long-term bearish for oil. To understand why, let’s consider why oil was trading over $100 per barrel in the first place.
For more than a decade beginning in 1999 crude oil steadily climbed higher as global growth and demand surged while the previous decade of low oil price was no incentive for producers to invest in new supplies. The combination of robust demand and restrained supply growth resulted in substantially higher prices for crude.
Factor in speculation, geopolitical instability and a steadily declining dollar and the price spike of 2007-2008 up to nearly $150 per was the result.
