In February, I predicted that crude oil prices would drop to $10 to $20 a barrel. At the time, the price of West Texas Intermediate was $54, down from $74 in November, when OPEC decided not to cut production in order to forestall further price erosion. And that was way down from the June 2014 price of $107.
The price did fall further -- to $43 in mid-March. But then the market bulls argued that oil was underpriced and headed for about $80, which was the global average cost to produce a barrel of oil. A rebound followed as bargain hunters rushed in. U.S. exploration and production firms raised about $11 billion in new equity this year.
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