Will Oil Prices Increase in 2017?
Texas is known for energy. The Texas Bankers Association (TBA) understands this and encourages its members to support the energy industry by offering innovative financial products. The November 2016 TBA Annual Strategic Opportunities Conference was a great forum for wrapping up the year and planning for 2017.
Crystal Ball on Oil
In 2008, the world’s oil prices hit their peak. There were continual wars in the Middle East and the Sub-Prime Crisis was right around the corner. In some respects, it was the end of a major economic boom.
Since then, the United States stock market has not only recovered, but surpassed its previous highs. The Dallas Fort Worth real estate market has been one of the strongest to recover. Dallas Fort Worth has seen 93.9% of its home prices recover to pre-2008 levels, compared to about 3% for Las Vegas.
Unfortunately, oil prices still have not fully recovered. The International Energy Agency reports that between 2013 and 2016, world oil supply has increased by 8%, while prices have fallen. This would suggest that the world economy is not growing by 8%.
Of course, this is a simple assessment; energy may account for more or less of the total costs of productivity, but generally a growing economy will need more oil. China continues to need more oil for high productivity.
Innovating Energy Loans
During the TBA annual conference, the financial leaders explained how they could continue to increase revenues. Dallas based NexBank CEO John Holt offered his advice on the panel named, “Reinventing Community Banking: Perspectives on Competing by Innovation.” Due to rising home prices, Dallas citizens are ready to invest in more housing developments.
While oil prices might not increase in 2017, the Texas bankers seem prepared. NexBank has student loans, mortgages and institutional services to fall back on.