Oil Prices Crashing Again. Brent Hit Below US48 Per Barrel

Oil prices are crashing again. Yesterday the price per barrel of benchmark Brent dipped below US49.  Here is some news:

 

 

WTI and Brent tumbled on Thurs

lowest levels since OPEC cuts in Nov 2016

Brent dipped below $49 per barrel on Thurs

rapid rebound in U.S. shale production
U.S. crude inventories record high 535 million barrels end March

WTI sank to $46 and Brent fell into $40s for first time in 2017

gasoline stocks increased slightly 

 
dramatic growth in U.S. oil production 

April added 28,000 bpd, taking U.S. output up to 9.293 million b/d

up by 200,000 bpd since March, up by 450,000 bpd since year began

industry could break all-time production records 

U.S. production “growing hand over fist, market remain oversupplied" 

more difficult to say oil prices will gain this year

projected Brent at US$57 overly optimistic

Adding to glut is Libya restored production

output above 700,000 bpd, another 500,000 bpd this year

OPEC cuts given enormous credit in rally up to $50 last Nov

now being discounted, focus on shale comeback. 

mistake to ignore rising U.S. production 

OPEC has already been priced into the markets

leaves massive risk to downside if OPEC fails to cut further

My comments : Of course this is very good news for the world economy.  Airlines will cut air fares and tourism will pick up all over the world.

Cost of transport will decrease and prices of goods and services will ultimately either become cheaper or NOT INCREASE for longer periods (more likely scenario).

Inflation will decrease. 

Petronas will be in deeper  sh_t.  So will our gomen finances.  The kleptocrats will become more creatively  stupid at stealing from a shrinking treasury. 

The Ringgit may weaken or not strengthen as much as it could, would or should.

Lets see.