WTI oil barrel is $ 50.3 on average since 1 January, the lowest level in 10 years! The question is whether this is a correction in a bull market or a change in trend?
n°1 (first circle) :
In 1970, the US reached peak production and then there are two oil crises in 1974 and 1980.
n° 2 (second circle) :
In 1998, the oil price is at its lowest point in the world 2006-8 probably reached its peak in conventional oil production and the third oil crisis in 2008.
Then, gradually, in 2008-2014 US shale oil production (unconventional oil) generated sufficient production for the world supply becomes surplus liquid!
In the 70s, the beginning of the decline of US production subtracted a share of world production, forty years it is the opposite that this product with the resurrection of US oil production.
Today you have to choose and you have two options:
Take the blue pill: the market remains over-production for two decades as in the 80s and prices are falling again and again.
Or choose the red pill: With peak production of conventional oil, things change, and the upward trend will soon resume.
Whether you choose the blue pill or the red pill and follow the white rabbit remember that in both cases the oil (energy, metals, agriculture ..) remains cyclical.
I find the metaphor of Dr. Miller (former BP geologist) about the fort proper shale oil : "We're like a cage of lab rats that have eaten all the cornflakes and discovered that you can eat the cardboard packets too."
Dr Thomas Chaize