GARY SHILLING: The failed Doha meeting is proof that oil is still headed for $10
Members of the oil cartel OPEC and non-members who collectively pump out about half the world's oil met in Doha, Qatar on Sunday to try to agree on production limits. The aim was to provide a boost to oil prices.
However, it all ended without an agreement, in part because Saudi Arabia was not willing to sign anything without Iran on board.
Shilling first made this call in an op-ed over two years ago.
And right after the failed producers' meeting in Doha on Sunday, Shilling thought he'd remind us of where he sees oil going.
Right after the futures market opened on Sunday, West Texas Intermediate crude fell nearly 7% to about $37.61 per barrel. Prices recovered a bit on Monday.
Shilling explained his reasoning for this forecast in Business Insider's latest 'most important charts' feature.
The idea is that after US shale producers started to threaten OPEC's market share, the cartel, led by Saudi Arabia, went all out to boost production and see who could withstand cheap oil the longest.
His thesis is that the price that becomes completely unbearable is $10, which is the marginal cost of oil, or what it takes to produce one extra barrel.
Business Insider, Gary Shilling
- Ashok Gehlot: Magician leaves centre stage in Rajasthan
- Trauma made Abrar an 'Animal': Bobby Deol on his negative role
- Victory of Modi's guarantees, say BJP leaders as party sweeps states states
- Sunil Kanugolu: The poll strategist behind Congress' win in Telangana
- Digvijaya and Kamal Nath are now history, says Ashwini Vaishnaw as BJP attains victory in MP