Experts believe that oil prices will continue to fluctuate this year

After five consecutive years of oil prices around $100 a barrel, the price of oil fell by half within half a year and could be described as a crash. Experts pointed out that the high crude oil price climbed to US$107 in the first half of this year was mainly caused by geopolitical factors. However, with the dilution of geopolitical factors, the market began to pay attention to the worse than originally expected in Europe and Japan. In particular, the locomotives of the world economy in the past five years have started to slow down significantly, which means that the world market demands crude oil. It will be greatly reduced. Craig Alexander, chief economist at Toronto's Dominion Bank, believes that the decline in demand for oil is the initial reason why world oil market prices have started to fall.

On the side of oil supply, the Organization of Petroleum Exporting Countries (OPEC) chose to remain unchanged, regardless of how bad the price of oil fell. There seems to be little reason to explain this behavior. One of them is that OPEC wants to use this drop in oil prices to fight non-traditional oil-mining companies that have sprung up like the US shale oil developer and Canadian oil sands. Mining companies, because these oil production companies have high mining costs, averaging about $60 per barrel.

The world’s major investment bank, Morgan Stanley, predicts that oil prices will fall to more than 40 US dollars before it stabilizes. Some forecasts are even more pessimistic than this. However, the consensus among experts is that in 2015, do not want to see a stable oil price. Crude oil prices in the world market will fluctuate considerably and oscillate. The turbulent region should be between US$40 and US$70 per barrel. Randy Ollenberger, an analyst at Bank of Montreal in Canada, believes that world oil prices have not yet bottomed out. Only after the OPEC countries begin to reduce daily oil production can oil prices stabilize. In the first half of 2015, OPEC’s production cuts are unlikely to happen.

Although Canada’s oil sands oil exploration companies are also high-cost oil producers, some oil companies have announced plans to cut investment scale and investment projects in 2015. However, due to the huge investment in oil sands development and the project construction takes several years, There are still a lot of oil companies investing in oil sands in Canada who choose to “clench their teeth” and hope to survive this or two years of hardship. It will be better if the price of oil rises.