Crude oil will collapse to $20 a barrel this year as the recession takes a deep toll on fuel demand, predicted Philip Verleger yesterday in an telephone interview to Bloomberg.
According to the article written by Grant Smith, a crude oil surplus of 100 million barrels will accumulate by the end of the year. This would send the oil price to a seven-year low, as the supply exceeds demand by 1 million barrels a day. Yet OPEC seems not to realize the magnitude of the production cuts needed.
As the readers of Green Investing Now certainly know, a dramatic fall in the price of oil will bring bring the renewable energy stocks down, as well. The companies that are barely profitable would turn into negative which will of course be reflected on the stock markets.
On the other hand, most green investors probably would see this as a good chance to build stronger posititions in solar stocks or solar ETFs, for example. Green investors should not expect to make quick money with speculative investments, but rather a lot of money with sustainable investments in the long run.