50美元為何是目前油價最難逾越的鴻溝?

As of June 2016, U.S. production is at its highest level since 1972, producing approximately 9 million barrels of oil per day (bpd), an increase of 89% over the past eight years. Additionally, OPEC is ramping up its output to 32.77 bpd, resulting in the largest rise in production since 2008. If OPEC continues to pump at this rate, then the surplus of oil is expected to jump to 950,000 bpd by the end of 2016, an increase of 160,000 bpd from the previous March estimate.

Along with production in 2016, U.S. oil imports are surging. Since approaching a 20-year low in May 2015, imports have risen by 20% to 8 million bpd, according to federal data. This phenomenon was caused by multiple factors, including a recently unsanctioned Iran, excess storage capacity and high domestic shipping costs.

Removal of Iran’s Sanctions

Despite Iran’s inability to export oil to the states, the lifting of its economic sanctions has contributed to an indirect upswing in U.S. imports. After sanctions were removed in January 2016, Iran began to undercut its competitors’ prices in an attempt to gain lost market share. Due to this underpricing, countries that had been cut out of the market in Asia and Europe took to selling to the U.S. market in a substantial manner for the first time since the shale boom.

Excess Storage Capacity

As of May 2016, demand for imports has been chiefly driven by oil traders. These traders are utilizing the relatively high excess storage capacity within the United States to hold oil and secure higher prices via the futures market. The United States has filled only approximately 66% of its total storage capacity and still has room for nearly 100 million more barrels of oil. In comparison, Europe’s storage capacity is 90% full, while those of both South Africa and China are virtually full. Moreover, the rise in imports is driven by the steep cost of transporting oil domestically by train, a process that is more expensive than importing foreign crude.

Falling Demand

While a record level of global supply promises to drive down oil prices by itself, demand is also waning. In 2015, the demand for oil had grown by 1.54 million bpd from the previous year. The forecast for 2016 predicts this growth in demand will slow to 1.2 million bpd by the end of the year. One of the causes of this slowdown is falling gross domestic product (GDP) growth worldwide. From 2014 to 2015, global GDP growth depreciated from 3.9 to 3.1%, and it is expected to maintain this trend into 2016, where economists predict the range of growth to be between 2.3 to 2.8%. Another major contributor to the decline in demand is the robust and resilient U.S. dollar. As it strengthens, oil becomes more expensive for people paying with foreign currencies. According to Morgan Stanley (NYSE: MS), a 5% increase in the dollar’s value could result in a drop in oil prices from 10 to 25%.

Investment Options

For investors looking to gain exposure to oil, the United States Oil Fund LP (NYSE Arca: USO) and the Energy Select Sector SPDR Fund (NYSEARCA: XLE) are the most popular options. However, these funds have key differences. XLE, which has a low expense ratio of 0.14% and a high dividend yield of almost 3%, invests in 42 different oil companies globally, with Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) making up 33.65% of its portfolio. Its diversity of investment, as well as its favorable dividend yield and expense ratio, make XLE the best choice for long-term investors.

USO is only suitable for experienced investors looking to take a short-term position in oil. Due to the design of the ETF, which invests in near-month oil futures contracts to track daily price movements, USO bears an exorbitant management fee of 0.45% and is exposed to time decay. Every month, USO must sell its current futures contracts before expiration and roll out to the next month’s contracts. Due to the pricing of futures contracts, the longer a position is held in USO, the more likely it is for roll costs to occur as a result of time decay. To fully understand how these factors can affect the USO price in the long term, investors can examine the years of 2009 and 2010, when the spot price for oil increased by 98.74%, but USO only appreciated by 3.12%.