Australian Investment Blog

What does history tell us results from low oil prices?

We have all read about the recent plunge in Crude Oil prices, with the finger of blame being pointed at OPEC for not cutting production –see chart 1. The lack of world economic growth and increased production of energy alternatives are also clearly significant factors. Interestingly from a seasonal perspective January / February (chart 2) is the time to be buying Crude Oil so my “best guess” is Crude will trade between $US40/barrel and $US60/barrel for the rest of 2015 hence oil stocks are likely to be good trading buys below the panic levels seen in December; I am likely to look at Woodside via options again if the opportunity arises.