What’s Next for Oil Prices in 2016 and 2017

Oil prices surged during the first half of 2016. In February, the price of the U.S. benchmark West Texas Intermediate (WTI) hit a historic low of $26.21, but it rose more than 50% in the following months. The global benchmark, Brent crude, followed a very similar pattern in the first half of 2016.

Oil PricesDespite price fluctuations in June and July, Money Morning Global Energy Strategist Dr. Kent Moors believes the WTI crude oil price is currently in a sustainable range and could hit the mid-$50 per barrel by the end of 2016.

He forecasts that WTI crude oil prices will climb to the low $60 per barrel range in 2017 and sees Brent oil prices per barrel in the mid $60s next year.

Before we get into why our Money Morning oil price prediction shows these double-digit gains in 2017, here’s a recap of the 2016 price fluctuations…

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Summer, Travel and Medication – Part 6 – Motion Sickness and Jetlag

For extra sensitive persons prevention of motion sickness through medication can be considered. H1-antihistamines, having an anti-emetic effect are used for this purpose. They have to be taken ½ to 1 hour before the journey starts and in longer travels it can be considered to take an extra dose after six hours. It is very important to stress that these types of medication cannot be taken by pregnant women. Small children under the age of two years should not be given any anti motion sickness medication either. It is a fact that motion sickness does not regularly occur in young children any way. Be very careful as well when driving a vehicle when under the influence of the medication: it has a very sedative affect and you could fall asleep behind the wheel of your car. Same restrictions apply if you are working with heavy power tools: the danger here is that the medication affects your ability to concentrate, with possible serious accidents as a consequence.

Jet Lag

A recent article in The Lancet shows once again that there is no one remedy to counteract or prevent jet lag. Some people advice melatonin, next to a lot of measures, not involving medication. There is a lot of conflicting evidence to be found when researching the effects of melatonin on jet lag. Sometimes a favorable effect is reported in the scientific literature and sometimes no effects at all are reported. What to think about that? Fact is however that there is very little known about the safety of using melatonin. Some studies show it to have an effect on the medication that prevents the blood from coagulating prematurely. Some countries have banned the use of melatonin in drugs all together. So as always: when in doubt consult your family doctor who will advise you what best to do.

This was part 6 of a series of 6 articles about travel and medication. The other parts being: Part 1 Vaccinations – Part 2 Travelers diarrhea – Part 3 Lyme’s disease – Part 4 mountain sickness and heat stroke – Part 5 Malaria – Part 6 motion sickness and jet lag.

The First Half 2016: Supply, Demand, and the Spiking Dollar on Brexit Fears

The rise in oil prices during the first half of 2016 was driven by two of the most basic economic forces: supply and demand.

First, in May, the price of both WTI and Brent hit a six-month peak when the International Energy Agency (IEA) forecasted a drop in production of 200,000 barrels daily during the last six months of this year.

Second, not only was expected supply dropping but expected demand was rising. Several months ago, the IEA reported demand projections rising in 2016. The IEA estimates that worldwide demand will increase by 100,000 barrels daily this year as well. The driver? Largely China and India, two robust emerging markets.

Falling supply and rising demand have been bullish for oil prices in 2016.

The first half also had the U.K.’s vote to leave the European Union in late June. Moors terms the Brexit decision “the biggest single event to jolt markets in decades.” Why? In the short term, it sent markets – oil, stock, and currency – down steeply on uncertainty fears.

In the case of oil specifically, though, the flight to a safe haven in the U.S. led to an increase in the U.S. dollar. Because oil is denominated in dollars, it becomes more expensive to overseas buyers when the dollar advances. That can restrict their demand going forward.

While Moors believes that the two-year negotiations between the U.K. and the EU will continue to exert a downward drag on oil prices, any weakness will be offset by bullish factors later in the year and into 2017.