“Should I invest in crude oil,” is a regular question that investors ask because they see the cost of a barrel of crude oil making headline news regularly. Making decisions about the best time to invest is difficult for the experts so it is perhaps better to allow professionals to guide you.
How Have Crude Oil Prices Changed?
A brief Internet search will show that Brent crude oil used to trade at over $100 a barrel. During the past year the price has settled to somewhere around $50 a barrel, but it did dip to under $30 a barrel in early 2016 before gradually climbing back to $50 a barrel around the middle of the year.
Between 2011 and 2012, oil was often sold at over $120 per barrel, but fell steadily and regularly from 2014 to 2015 to current levels where it has stayed for around two years.
Has The Lowest Price Been Touched?
Your previous investment focus may have suggested that you should always buy when prices are low and sell when they are high.
Some of the reasons that oil prices are currently lower are connected to the laws of supply and demand. Demand has slowed around the world, particularly as the business growth in Japan, Europe and China has reduced in recent years, requiring less oil to be purchased for those zones. At the same time, America has vastly reduced the amount of oil that it imports from overseas as the country persists in finding oil reserves within the US and Canada.
To consider whether the price may go any lower, there does not appear to be any evidence that there will be a shortage of oil in the near future. Prices have lowered because the supply of oil has not reduced sufficiently while the demand for oil has generally reduced. You may be asking “Should I invest in crude oil?” as you consider other investment opportunities. There is no easy answer, except that it is best to take professional advice and consider pooled investments to limit the risk to your overall portfolio.
Should I invest in crude oil?
Many experts suggest that oil prices have probably reached the lowest point because they believe that major oil producing countries, such as Saudi Arabia and Russia, have continued to produce oil because they chose to hold onto their market share, whatever the price, to help put off other countries from searching for new oilfields.
Will crude oil prices drop lower? Maybe, but not by much or for long; probably!
Should I invest in crude oil is a sensible question for most investors? crudefunders.com will explain how crowdfunding may be your best way to invest in oil.