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Jesse Colombo, the economic analyst who predicted the oil prices bust 

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FULL CREDIT TO THE EXPERT WHO CORRECTLY PREDICTED THE OIL PRICE CRASH

Screen Shot 2014-12-22 at 21.08.35By John Donovan

In June of this year Forbes.com published an extensive prescient article by Jesse Colombo, an economic analyst, under the headline:

“9 Reasons Why Oil Prices May Be Headed For A Bust”

His prediction made 6 months ago:

“There are a growing number of reasons, however, why crude oil prices are likely to finally experience a bust in the not-too-distant future.”

Jesse Colombo correctly predicted an event of huge significance. Ask Putin or Shell’s Ben van Beurden.

Some further extracts from his brilliant article, which deserves reading in full.

While extreme aggregate trading positions can persist for quite a while, as is the case in the crude oil market for the past few years, they are still a reliable indication that a powerful market reversal is likely to occur when the proper catalyst eventually appears and sends speculators heading for the exits. So far, no bearish catalyst has presented itself in the crude oil market, but the other points that I’ve listed in this piece may combine to form a perfect storm that finally causes the oil market to crack.

The 9 cited reasons are:

1) The unwinding of record speculative bullish bets

2) The “smart money” is growing increasingly bearish

3) The global monetary environment is tightening

4) The shale oil boom is increasing supply

Surging North American oil production, courtesy of the recent U.S. shale and Canadian oil sand booms, is dramatically reducing U.S. oil imports and has even led to a glut of light, sweet crude oil in the United States.

5) Production is starting up again in many countries

6) OPEC’s limited ability to boost prices by cutting production

When oil prices dropped significantly in the past, OPEC countries would cut their oil production to bolster the price of oil. Growing fiscal deficits in many OPEC nations in recent years, however, make it far more difficult to cut oil production because these countries can no longer afford the loss of oil revenues.

7) Global oil demand is slowing

Led by China and other emerging nations, global oil demand spiked in the years following the 2008 financial crisis, which contributed to oil’s bull market. Since 2011, oil demand growth has slowed significantly to a half-decade low largely due to the ongoing economic slowdown in China and emerging economies:

8) The global economic “recovery” is actually another bubble

9) The ending of the commodities supercycle

Link to the full article with explanations for all 9 reasons.

(Jesse Colombo is an analyst and anti-economic bubble activist who is currently warning about growing bubbles in Canada, Australia, Nordic countries, China, emerging markets, Web 2.0 startups, U.S. higher education, and more. He believes that the popping of these bubbles will cause the next financial crisis.)

RELATED

Oil’s Swift Fall Raises Fortunes of U.S. Abroad: NEW YORK TIMES 24 DEC 2014

Extracts

BRUSSELS — A plunge in oil prices has sent tremors through the global political and economic order, setting off an abrupt shift in fortunes that has bolstered the interests of the United States and pushed several big oil-exporting nations — particularly those hostile to the West, like Russia, Iran and Venezuela — to the brink of financial crisis.

After a precipitous drop, to less than $60 a barrel from around $115 a barrel in June, oil prices settled at a low level this week. Their fall, even if partly reversed, was so sharp and so quick as to unsettle plans and assumptions in many governments.

But the biggest casualty so far has probably been Russia…

FULL ARTICLE

RELATED

Oil Price Bust Foreseen: Is Jesse Colombo a bone fide time traveler?

3 Comments on “Jesse Colombo, the economic analyst who predicted the oil prices bust ”

  1. #1 Terry McNeil
    on Dec 27th, 2014 at 14:30

    No doubt Jesse’s track record is superb – and the consequences of the oil price drop are going to trigger a global recession if not worse. Already the BIG Oil companies are borrowing to pay dividends and you can rest assured that upstream exploration and development is going to be curtailed dramatically setting the stage for shortages down the road.

    The bigger immediate problem will be the growing political and social unrest that could hit China, Europe, Japan and others, while intensifying the on-going Mid-East troubles. Under the weight of all this plus a reversion of interest rates to the normative mean – expect asset values to collapse by 50% or more world-wide, starting with bonds, then moving to equities and real estate. No magical logic here – just the harsh non-negotiable application of present value mathematics.

    Making it very hard to greet folks with positive tidings for the next and coming years. They just “ain’t” looking too good.

  2. #2 Alex
    on Dec 27th, 2014 at 07:15

    I’m following Colombo since long time. he tend to be more negative in his prediction but lately he has very reasonable and interesting analysis in markets and ecanomy

  3. #3 Lynn Albert
    on Dec 26th, 2014 at 20:13

    Jesse Colombo’s prediction of oil just proves once again
    Jesse ability to target with accuracy in todays economic market.

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