Oil is collapsing these days and I wanted to know if there is a fundamental reason? Is it new discovery for alternative energy? How come the sanctions on Iran that will start next month are not reflected in the oil's price? Thanks!
There are multiple factors I can see driving oil pricing at the moment:
Lack of demand leading to lower prices paid
New capacity coming from Nth America due to freeing up of power generation by switching to natural gas due to much lower pricing, local delivery and huge availability because of fraking
Saudi Arabia increasing supplies to reduce viability of other exploration/exploitation areas eg; African/deep ocean drilling
An attempt by the Saudis and the USA govt to kick the US economy going by reducing a substantial cost of doing business.
This list is not exhaustive, and there are many factors at play, and most are not obvious to all (including me)
If the fundamentals were any good, then EURUSD should be somewhere near 0.80 after 3 years of euro-related crisis. Everybody would have shorted the euro and we would all be rich. Gold shouldn't be falling since last summer, nothing fundamental happened to make the markets more risk-loving. Unfortunately it appears that the markets don't watch the Bloomberg.
BTW guys, what do you think about the alternative sources of power? Are there any works on them?
I personally don't think that these sources can be discoverer in the nearest future. The oil industry has just HUGE lobby that is going to stifle any project endangering oil companies profits. The alternative sources in my opinion can be discovered only when there's a clear sign of all global resources depleting.