Karoon or Kaboom, page-77

Oil Prices Rise on Large Crude Inventory Draw

Talk of oil prices crashing from here is just that talk. Crude draw of late has been quite higher than expected. Opec has already agreed to hold off turning on the taps till December. That means they will further look at it then, Keep in mind the need for oil prices to be around 80+ for these countries to balance there economies. So they are also able to turn the taps off if needed, as they are to turn them on if they see the need.

The price can drop under the control of Opec. as they did some time in a price war to drive it to a negative price. So really think if oil is low say brent around 60 for any extended period there will be no incentives to reinvest in exploration. That then will only drive the price to higher limits. This is exactly what Opec and other producers do not want. They want a stable oil market. That helps all players and does not drive up inflation when the prices peak.

With daily stupid news head lines, the price can be driven down to 50 and or can reach over 100, so who does this help in the long term. Only the punters that buy on the low end of the market push. Kar Paying a div now and the share price being driven down, we all can add to our holdings with value to be added after the the over reaction is in the rear view mirror. The bottom predictions are not relevant as they are just a guess . The only relevance is the that the price you pay is today is far less than the price in the future.