After reaching just over $40 per barrel late last month, the price of crude oil has been gradually climbing, suggesting to some financial experts that the collapse in oil prices is slowly coming to an end. The price of oil is now trading at around the $50 mark.
According to one finance guru, we may have not seen the bottom yet.
Jim Rogers, chairman of Rogers Holdings and bestselling author of “Hot Commodities,” told the Economic Times in an interview that with any collapse there is some sort of rebound, but he purported that oil prices haven’t bottomed out quite so quickly.
“Whenever you have a major crude collapse like the current one, there has to be a rebound,” said Rogers. “However, normally the prices test the bottom before rebounding. I am not sure if we have seen the bottom yet.”
In other words, a rally is perfectly normal. Soon after, the price lags and there is another brief flirtation with the bottom. This will happen in the United States, too.
“Owing to the collapse in oil prices, inflation everywhere is down,” posited Rogers. “Oil may stay down for a while, or even go further down and test the lows. Maybe prices will go up by a few more dollars. But by spring this year, we will probably see a new test of the bottom.”
Rogers was also asked about gold in which he said that he’s not a buyer of the yellow metal right now. “I am not a buyer now. I have hedged some of my gold, but not all of it. But I do expect another chance to buy gold later.”
We probably won’t see $100 oil anytime soon because of the market still needs to stabilize. With so many United States shale companies cutting back on staff and production and even filing for bankruptcy, the expensive form of oil will likely diminish its presence in the global oil market.
In the meantime, consumers should still be taking advantage of these oil prices by pocketing that saved money and keeping it for a rainy day.
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