How low oil can go – $9 per barrrel
Could oil really reach $9/barrel? Absolutely! If you’ve been keeping up with the latest news, you’ll see a number of self proclaimed experts calling a market bottom in oil. Here’s a round up of some recent stories just to name a few:
With analysts and experts alike all predicting where the market will bottom, it can be a confusing time for royalty owners. How low will the price go? When will it rebound? The truth is that no one knows how low the price of oil will go. Each news outlet seems to be stumbling over themselves to print an even lower oil number. Why? Plain and simple, they want people to read their article about the worst case scenario. You checked out our article to find out how the price of oil could reach just $9/barrel right?
Don’t let the media get away with this never ending game! It’s important to know the facts about the price of oil. As a royalty owner, you want to make informed decisions about your royalties in Texas. If you’re considering selling royalties in Texas, it’s important to look at the situation with a clear view of what’s actually happening.
The Truth about Oil Prices
Truth #1 – No one knows where the price of oil will be in 6 days, 6 weeks, or 6 months. If they did, they would be a billionaire many times over. There’s only one thing we know for sure, the price of oil is going to move up and down based on a number of different factors.
Truth #2 – Supply and demand are what ultimately determines the price of oil. If the price of oil drops below $50/barrel due to increased supply on the market what happens? It’s no longer profitable to produce oil in certain areas where it’s only $50/barrel. What does this do to supply? It causes supply to drop which means the price of oil rises. In a nutshell, this yo-yo effect takes place every day. What you are seeing in the market right now is supply is very high and it takes the market time to adjust accordingly. This is why you’ll see rig counts start to decrease and supply will start to dwindle as drilling stops. This is a never ending battle. Sometimes the market will go too far one direction or the other, but it’s all about supply and demand in the end.
What to do about Oil Prices
We get a lot of inquires from mineral owners asking what they can do about oil prices. The truth? Not much! The price of oil is not something you can control. What can you control?
If you are receiving royalties, you could choose to sell royalties in Texas. Why Sell royalties? The reason is that you aren’t exposed to the price of oil moving up and down. When you sell oil royalties in Texas, you get a guaranteed amount up front and your royalty checks will no longer fluctuate. If you have questions about your royalties or you are considering selling royalties, fill out the form below.