Where are oil prices going next?

Was reading an entertaining article titled I Have No Idea Where Oil Prices Are Going (And Neither Do You) which got me thinking. While we’re understandably bullish on oil at TAG Oil, this piece made a good point that anyone who purports to see all the oil pricing trends is clearly engaged in revisionist history…or psychic.

Between June 2014 and January 2015, oil prices fell more than 50%. And it was pretty much totally unexpected, regardless of what pundits now say in hindsight. One simple way to illustrate that fact objectively is by keyword searching “oil prices” on Google Trends.

As you can see in this chart from Boris Marjanovic’s article on Seeking Alpha, “with the exception of a few small spikes in 2011, search volume was in a long-term downward trend. This makes sense, given that the price of oil was fairly stable during this time period. In fact, search volume was at its lowest point in mid-2014 (right before the crash began). But once oil prices were clearly falling, search volume increased more than tenfold within a matter of months. The fact is, if people really had been anticipating an oil crash, search volume would not have been in a downtrend during the first half of 2014.”

Blog Google Oil Price Search-BMarjanovic

Why would we talk about this on our blog when we obviously think that oil prices are on their way up? Well, because we agree: oil price movements are unpredictable. And it’s this sometimes wild fluctuation that makes oil such an excellent trading vehicle.