The falling oil price is good news for the consumer, a catastrophe for oil companies and countries that depend heavily on black gold, but Goldman Sachs chief Gary Cohn thinks oil is going even lower, and could perhaps dip as low as $30 per barrel.
Oil began its historic drop during the summer of 2014. West Texas Intermediate’s March delivery is down to $45.15 a barrel, which is the lowest point on the New York Mercantile Exchange since 2009.
OPEC met with criticism in November for refusing to cut production targets, which would have relieved the steep decline in oil prices. Consumers, however, have more purchasing power as they pay lower prices at the pump.
Cohn told Bloomberg, “If you’re a consumer today and you can lock in these prices, you’re a lot more aggressive in the markets in hedging than you ever have been. The flip side is if you’re an oil exporting country today and you’re looking at these oil prices and you see a fairly steep forward curve and you see 10 or 15 dollars of price higher a year forward than you do in the spot market, you have to consider trying to lock in that forward price.”