Since there is a good chance I will be put 1000 shares of Energy Select Sector SPDR® ETF XLE on Friday – this is not an academic question for me. Much like the predictions of $200 Oil during the boom – we are now seeing calls for $20, $18, and even $10 Oil:
- CNN Money – Strong dollar could send oil to $20
I don’t see how that would be possible for a sustained period of time – but during a panic, anything is possible. In the meantime – the big Oil Companies continue to cut back production and cut costs:
- Business Insider – BP is cutting 4,000 jobs
I irony is – the lower Oil prices go in the short term, the more Oil Companies are going to cut future investments (read future production) – so the higher the costs will be over the long term.
And it is not just Oil right now – all the commodities seem to be getting crushed, even Agriculture:
- Bloomberg – The Crop Surplus is Bad News for America’s Farms
From the article: “(Farm) Debt is 6.6 times larger than net income, up from 3.8 a year earlier, and the ratio is the highest since 1984, when farm foreclosures were the highest since the Great Depression, government data show.” yikes!
2016 is getting off to a rough start for Frackers and Farmers in the USA.
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