Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Where will oil prices head in 2013?
Wed, 30 Jan Pre-Open

The oil markets are notorious for being driven by speculation rather than the actual demand and supply dynamics. Nonetheless, every time the OPEC (Oil and Petroleum Exporting Countries) comes up with estimates, the world is all ears. This is because the cartel controls around 40% of the global oil supplies. So OPEC has once again gone public with its estimates on oil markets in 2013. It has a stable outlook on the same and has given guidance of around US$ 110 a barrel on average for oil prices. This compares with actual annual average of around US$ 111.5 per barrel in 2012.

OPEC expects 2013 to mirror 2012, as suggested by improving growth rates in China, India and US. However, this guidance excludes the geopolitical events that can have a potential impact on the oil prices. Keeping history in mind when geopolitical events have over ridden all factors to govern oil prices, the guidance carries hardly any weight and leaves everything to time. Also, the statement from OPEC that it is likely to keep its production stable for the time being should be taken with a pinch of salt. The cartel has hardly ever stuck to the limits it has set for itself. Infact in the months of November and December itself, Saudi Arabia, the highest oil producing member country of OPEC had cut supplies to the lowest in the year.

And then there are events in the non OPEC regions that suggest otherwise. While OPEC projects a stable outlook, the weak global growth and higher domestic oil production in the US suggest subdued prices in the future. A higher production from US could be a threat to OPEC's monopoly in oil markets and impact the cartel's influence on oil pricing in an adverse manner. Though OPEC is downplaying the increased production from US and suggests stable production, one should not be surprised to see OPEC reacting to the changing supply scenario by cutting supplies leading to price rise. To conclude, the variables that decide oil markets are huge and it is best to be prepared for the volatility that oil markets are so well known for rather than hanging on to every word spoken by the OPEC.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Where will oil prices head in 2013?". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.