The supply and demand picture has changed drastically enough in the past 12 months to justify the oil price doubling in that period.
This story has been updated with Monday's Citigroup forecast. The outlook on oil prices is clear: Oil will crash. Unless prices surge. Definitely one or the other. Crude just had the biggest two-week gain in 17 years, but it’s still about 50 percent cheaper than it was in June.  Right now the oil market is totally focused on finding a bottom for oil prices. However, according to OPEC's Secretary-General Abdulla al-Badri we've already hit bottom. Not only that, but he sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future. He's far from the only one that sees a return of triple-digit oil prices. Source: Flicker User Spino73. OPEC’s Secretary-General not only thinks oil prices have bottomed, but that it sees oil prices exploding Iran has at least 14 oil tankers idling in the Persian Gulf, according to Bloomberg, prompting guesses that they are preparing for something military. But they could simply be having problems selling oil. And it’s not just Iran, says George Friedman of Stratfor. All of the above factors have been obvious for a long time. It’s much harder to argue that anything about the supply and demand picture has changed drastically enough in the past 12 months to justify the oil price doubling in that period. Prices could start rising again. If the gulf producers have their way, prices will not go back to $100 a barrel. Even at prices well below $100, American shale oil producers will find ways to drive down costs and output will start rising again. And the world’s new swing producer will find itself back in the swing of things. Over all, the fall in oil prices could mean a $1.5 to $2 trillion transfer from oil-exporting countries to oil-importing countries. Japan will be a big beneficiary. However, that future is in jeopardy due to the recent plunge in oil prices. As the following chart notes, oil and natural gas prices are well below recent peak prices. Brent Crude Oil Spot Price data by YCharts This fall in oil prices could put the brakes on our higher-cost oil production growth from shale. The fall in oil prices is making it less likely that this gas will be an economical option for LNG, as even our cheap gas might not be cheap enough any more. So, if LNG demand doesn't materialize it means production growth from higher cost sources won't happen either. For years analysts have been behind the curve on oil prices as oil blistered past predictions of $40 a barrel, then $65 a barrel. But now that it has hit a record high (even adjusting for inflation), suddenly everyone seems to be long oil. All of the above factors have been obvious for a long time. It’s much harder to argue that anything about the supply and demand picture has changed drastically enough in the past 12 months to justify the oil price doubling in that period. These are being abandoned as oil prices rocket, which will hurt demand. For example, Sri Lanka, Indonesia and Egypt recently hiked petrol prices by 25%, 33% and 40% respectively, reports Neils C. Jensen in the Absolute Return Letter. All of the above factors have been obvious for a long time. It’s much harder to argue that anything about the supply and demand picture has changed drastically enough in the past 12 months to justify the oil price doubling in that period. From 2010 until mid-2014, world oil prices had been fairly stable, at around $110 a barrel. But since June prices have more than halved. Brent crude oil has now dipped below $50 a barrel for the first time since May 2009 and US crude is down to below $48 a barrel. The reasons for this change are twofold-weak demand in many countries due to insipid economic growth, coupled with surging US production. Russia loses about $2bn in revenues for every dollar fall in the oil price, and the World Bank has warned that Russia's economy would shrink by at least 0.7% in 2015 if oil prices do not recover. We wanted to take a look at what could happen if WTI crude falls below $90 a barrel and stays there for a while. WTI bounced off a price below that level already in September, but it has not spent any time below $90 a barrel since January.  * The bigger story for the global economy is the collapse of oil prices, not the collapse of the ruble. The speed of the oil-price crash will cause lots of reflection and re-examination on the part of investors. It will also likely lead to widespread derisking — a flight to safe assets like US Treasury bonds. 
http://www.bloomberg.com/news/articles/2015-02-06/these-experts-know-exactly-where-oil-prices-are-headed http://www.fool.com/investing/general/2015/01/31/opec-sees-oil-prices-exploding-to-200-a-barrel.aspx http://moneyweek.com/what-will-happen-to-the-oil-price/ http://www.nytimes.com/2015/01/25/opinion/sunday/what-happened-to-the-price-of-oil.html http://www.fool.com/investing/general/2014/11/01/energy-crisis-what-happens-to-americas-natural-gas.aspx http://moneyweek.com/what-will-happen-to-the-oil-price/ http://moneyweek.com/what-will-happen-to-the-oil-price/ http://www.bbc.com/news/business-29643612 http://finance.yahoo.com/news/happens-oil-drops-below-90-164020505.html http://www.businessinsider.com/what-will-happen-next-2014-12
what will happen with oil prices