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Why Oil Prices Could Be Near a Bottom

By Travis Hoium - Sep 5, 2015 at 12:05PM

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It looks like the oil glut that's sent prices lower may be starting to ease, which could mean higher oil prices are on the way.

Oil prices seem to be dropping, with no end in sight. OPEC is increasing production as prices fall, Iran could soon flood the market with nearly 1 million barrels per day, and U.S. producers are still increasing production year over year. 

But if you look between the lines, you can start to see how oil prices could spike in the coming years. U.S. oil producers aren't as healthy as they appear, and as the hedges they had against falling prices wear off, their financial conditions will worsen. Then there's increasing demand from greater sales of gas-guzzling vehicles.

By 2016, if OPEC wants to put the screws to consumers and send oil prices higher, it may have that option, as the figures in the slideshow below point out. 

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