Oil prices (both Brent and WTI) have been trading below $30 a barrel. The price of oil has dipped to levels that it favors more for buyers than for sellers. The rationale being that oil producers will definitely put a cap on the amount of oil production as consistently low margins (with the cost of production $40-45 per barrel) for fairly long period of time cannot be sustained.
OPEC countries are optimistic that the market will start to balance itself as weak prices take a toll on production outside the cartel. The organization expects non-OPEC output to fall by almost 700,000 barrels a day in 2016 as the effects of lower capital spending are felt.
The impact of lower oil prices can already be seen on oil companies. ConocoPhillips has announced a reduction in its global workforce by about 10%, on account of lower oil prices.
"Looking at the way, oil prices is falling, it might be a good opportunity for investors to place their bet on this asset. The only question would be to strategize the entry points in order to take the benefit of the large price variations/volatility." said Angel commodities in a report.
