oil field and pump jack

This oil crash could be the worst in more than 45 years, Morgan Stanley warns

Morgan Stanley has been pretty pessimistic about oil prices in 2015, drawing comparisons to the some of the worst oil slumps of the past three decades. The current downturn could even rival the iconic price crash of 1986, analysts had warned — but definitely no worse.

This week, a revision: It could be much worse.

  • Everyone Else

    These investment firms make money buying and selling shares. The more buying and selling the more money they make. All they care about is money flow. As a result, they’re always pushing either optimism or pessimism to scare investors into selling or tempt them into buying.

  • Exile1981

    The article is correct in that OPEC nations are hurting badly and they are ramping up extra capacity to try and keep cash flow going (ie they would rather sell 100 barrels at $25 each than 10 at $50) so they are dumping it on the market to keep any money flowing. Partly it’s because they have huge over heads and if the money doesn’t keep flowing then the peons will get angry and start revolting. The Saudis and Venezuela are two examples of countries dumping oil just to keep any cash coming. You also have the new Kuwait rebel gov’t fire sale on oil and it’s keeping prices low. Now that Obama has decided Iran should be free of restrictions and allowed to sell oil and they will suddenly be selling off all the stocks of oil cheap to get some cash coming in as their economy was doing poorly under sanctions.

    It’s all about economics.

    At $50 a barrel most of the oil sands projects are loosing money. They will still sell to keep the equipment bringing in cash. Mothballing a SAGD plant or any processing plant costs millions to do it correctly. It’s not what people think, you don’t just turn it off like a radio or a car. If you do it correctly the plant should be in the same condition when you bring it back to life; which costs money. Don’t do it correct and you’ll come back to a pile of scrap metal and an environmental clean up mess.

  • Maggat

    The price of crude is down? I didn’t know that, I just gassed up my car and the price at the pump is the same as it was over a year ago.

  • Norman_In_New_York

    There is one other premise these experts didn’t bother to raise. When prices plunge, politicians always look to raise fuel taxes.

  • mauser 98

    Morgan Stanley and the rest received unknown $$billions in bailout money re 2008 crash