Some global tendencies are still pressing oil prices. However, few experts pay attention to the fact that technological progress seen over the last few decades has been contributing to alternative energies and curbing the upward potential of the global oil market, Masterforex-V Academy experts report.
Apart from OPEC’s excessive oil production as well as the economic slowdown in China’s, the world’s biggest consumer and importer of crude oil, there are some other reasons why crude oil prices are going down and may never see the same highs again. The so-called shale oil revolution seen in the USA is on of those major reasons. Innovative technologies are the force driving the progress that led to the shale boom. It is the shale revolution that gave small-cap companies to start producing oil in the USA and abroad. As the result, OPEC members saw it as a threat to their market share. That is one of the reasons why they do not want to cut their oil production despite ultra low oil prices. They keep on fighting for their market share and want to oust the shale oil companies by making their businesses unprofitable and forcing them to close their oil businesses. OPEC just cannot put up with the shale boom.
At the same time, the tech race keeps involving more and more companies worldwide. For instance, BMW and Mercedes are doing their best to create lighter and more capacious accumulators. Previously, few companies used to be interested innovative technologies. Now, the situation has turned into an international trend. Oil-based production of energy to store it in accumulators is just a temporary solution. More and more experts predict the end of the era of fossil fuels. The world is gradually turning its face towards the so-called green energy. Experts say that the future motor industry will be able to abandon oil to replace it with solar batteries and Tesla accumulators, not to mention other technologies.
People around the words start “cutting the wires” and use solar panels to produce electricity. This is more expensive at this point but the efficiency and price of producing solar energy is going to be dropping in the future, therefore creating even bigger pressure on the market of fossil fuels like crude oil. It is all about demand. Rich and relatively developed economies are going to be the first to switch to green energy in the future. This is going to be a gradual process. Multiple environmental laws are going to back the spread of green energy round the globe. However, we are not going to see a complete switch to green energy in a matter of decades. For now, we have to consume crude oil, natural gas and coal.
Given all the geopolitical and economic factors, experts say that the fairest price of crude oil is somewhere between $40-$50 per barrel. $100 per barrel is an abnormal price, artificially increased to gain more money.
Meanwhile, oil prices, are already way below $40/b and are still going down. This is confrimed by the chart below, courtesy of Masterforex-V Academy.
