TA indicates oil could go to $17. Analysts say it could go to...

TA indicates oil could go to $17. Analysts say it could go to $20.

Inelastic demand - Basically a derivative where demand is not influenced to a material degree by changes in price (Ropoh Defn), AKA oil. An ideal situation for suppliers.

In the oil chain changes in price does not change end user habits to any great extent and in fact large retailers could do very well when their wholesale prices are down, eg Caltex. There has been some mention of storage or wholesalers buying more from producers whilst prices are down, but storage also costs. There will come a point where maximum saturation is reached.

Current oil prices are a result of a strategy to eliminate high cost producers and slow exploration to increase / protect market share. So it comes down to who can produce in the lower cost range. I don't think oil can be extracted for much less than current prices, maybe could go a little lower.

I think a situation where producers are selling for less than their costs for any period of time won't happen. Its a question of how long the current low oil prices persist. Can the shale industry come up with cheaper extraction methods?

Digressing the drill bit is not far away. I believe market is very sceptical, so am expecting a nice little bump in the share price action when it hits the sea bed.

DYOR, IMO etc