19.10.2015 - The Problem With Oil Prices Is That They Are Not Low Enough
The problem with oil prices is that they are not low enough. Current oil prices are simply not low enough to stop over-production. Unless external investment capital is curtailed and producers learn to live within cash flow, a production surplus and low oil prices will persist for years. GDP (gross domestic product) correlates empirically with oil prices (Figure 1). GDP increases when oil prices are low or falling; GDP is flat when oil prices are high or rising (GDP and oil prices in the figure are in August 2015 dollars)...............................................Full Article: Source
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