Oil Prices May Crash

Oil has been rising for the past 10 years as the worldfind these new deposits and in a couple of years will
has come to the understanding that there is only abe able to tap them, which will put more money into
limited supply and national economies are tied to it. Tothe market. When this oil goes into the market the
many people the rise in oil price is a good bet becausedemand will decrease because world wide production
of its limited nature. It may be possible that oil will takehas increased.
a dive in price as it comes close to $100 per barrel asSince oil prices have been on the rise over the past
people begin to feel uneasy.decade countries have been investing in alternative
It is possible that people have made so much moneyfuel sources. For example, in the United States ethanol
on oil stock, futures, options and other investments thatplants have been springing up all over the pace, cars
people or large investment houses may dump theirare expected to increase efficiency and he
investments and take the winnings. If this happensgovernment is trying to cut dependency on foreign oil.
even a small decline could trigger and en masseThis will have a downward affect on the price of oil as
exodus from the market forcing a quick downwardthe need for it decreases.
trend on the price per barrel of oil causing the marketMany market analysts also believe the oil price of
to crash. A market crash could be as much as a 40%investments is also higher then its true costs. It is an
decline in the price per barrel.overheated market that may be waiting for a crash.
There are a number of forces around the world thatThey believe that it won't be long before people start
may make a dip in the market in the near future. Thetaking their money out because they believe it can't go
Middle East may become more stable in the nearmuch further. When people take out their money this is
future as the ending to the Iraq war becomes morewhen big changes in the market are going to be seen.
likely. Even though there is no guarantee that the$100 is a psychological barrier for most people. Oil
country will become stable it is a possibility it mayprices have never been this high in history and most
become this way as one side beats out the other. Itpeople simply can't imagine a time when oil will be this
isn't likely to have an immediate affect.high. Therefore, when the $100 threshold is met people
Since companies have found the oil market to be somay naturally become uneasy and begin to sell their oil
lucrative they have been scouring the world over forshares which could free up the markets and
new deposits. In their interest they have been able totemporarily reduce the costs.