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Will oil prices finally rebound in 2016, or will they continue to sag as the battle for world oil supremacy continues?

Some optimists believe the worst is over. Here's why.
For one thing, U.S. oil production is actually dropping off for the first time since Barack Obama became president.
Obama envisioned energy independence when he first came to office.
Offshore drilling increased and the shale gas industry continued to mushroom.
When the bottom fell out in 2014, that changed. Many felt increased OPEC production was only a temporary measure, that things would bounce back in a few months.
They didn't.
Approximately one year ago, the price of Brent crude oil was US$62 a barrel.
A month later it had plummeted to US$48. That's less than half the dreamy $100-plus price tags of previous years.
This past Wednesday, Brent was trading at US$36.71. It may have already dipped even lower since then.
Members of OPEC, however, are not beyond feeling the pain themselves. Some are even facing a serious budget crunch for the first time.
It's a long game of chicken, and OPEC may soon be forced to finally cut production and send prices back up.
There are caveats, however.
While they may cave in eventually, OPEC decided once again this month not to impose production limits.
And according to Bloomberg, some more adventurous oil speculators are betting on prices as low as $15 a barrel next year.
"The bearish outlook has prompted investors to buy 'put' options -- which give them the right to sell at a predetermined price and time -- at strike prices of $30, $25, $20 and even $15 a barrel," the news agency reported.
That would be reminiscent of 30 years ago, when oil fell from around $30 a barrel to $10 from November 1985 to July 1986.
Here's how Morgan Stanley's Martijn Rats recently put that era in perspective: "Halley's Comet was making its second appearance in a century.
France and the U.K. unveiled plans to dig what would become the Chunnel. IBM introduced the first laptop computer."
Is there a lesson in this?
Only that oil speculation is a high-risk game, and that governments would be wise to embrace the most modest projections on the map.
The provincial government has pegged $48 as the expected average price for the current budget period, and $51 for the next.
While that may seem reasonable now, it will seem wildly unrealistic if the bears win their bet.

Some optimists believe the worst is over. Here's why.
For one thing, U.S. oil production is actually dropping off for the first time since Barack Obama became president.
Obama envisioned energy independence when he first came to office.
Offshore drilling increased and the shale gas industry continued to mushroom.
When the bottom fell out in 2014, that changed. Many felt increased OPEC production was only a temporary measure, that things would bounce back in a few months.
They didn't.
Approximately one year ago, the price of Brent crude oil was US$62 a barrel.
A month later it had plummeted to US$48. That's less than half the dreamy $100-plus price tags of previous years.
This past Wednesday, Brent was trading at US$36.71. It may have already dipped even lower since then.
Members of OPEC, however, are not beyond feeling the pain themselves. Some are even facing a serious budget crunch for the first time.
It's a long game of chicken, and OPEC may soon be forced to finally cut production and send prices back up.
There are caveats, however.
While they may cave in eventually, OPEC decided once again this month not to impose production limits.
And according to Bloomberg, some more adventurous oil speculators are betting on prices as low as $15 a barrel next year.
"The bearish outlook has prompted investors to buy 'put' options -- which give them the right to sell at a predetermined price and time -- at strike prices of $30, $25, $20 and even $15 a barrel," the news agency reported.
That would be reminiscent of 30 years ago, when oil fell from around $30 a barrel to $10 from November 1985 to July 1986.
Here's how Morgan Stanley's Martijn Rats recently put that era in perspective: "Halley's Comet was making its second appearance in a century.
France and the U.K. unveiled plans to dig what would become the Chunnel. IBM introduced the first laptop computer."
Is there a lesson in this?
Only that oil speculation is a high-risk game, and that governments would be wise to embrace the most modest projections on the map.
The provincial government has pegged $48 as the expected average price for the current budget period, and $51 for the next.
While that may seem reasonable now, it will seem wildly unrealistic if the bears win their bet.

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