Crude’s Slide Continues
Jul 25th, 2008 | By Doug Casey | Category: Financial News, Oil Investment & Alternative EnergyIn the energy market Wednesday, crude for September delivery debuted as front-month contract by emulating its immediate predecessors, closing at $124.44/barrel, down $3.98. September reformulated gasoline plunged 11.55 cents, to $3.05/gallon.
Traders’ relief continued over Hurricane Dolly’s lack of damage to energy facilities in the Gulf of Mexico.
In addition, the Energy Information Administration stoked bearishness with its weekly inventory numbers. The EIA reported that crude stocks declined by 1.6 million barrels in the week ended July 18, a bit less than expectations.
The EIA also said that gasoline supplies rose by 2.9 million barrels in the latest week, while distillate stocks gained by 2.4 million barrels. Both came in higher than expectations. Refineries were operating at 87.1% of capacity, as opposed to 89.5% the previous week.
Perhaps more important, Wednesday’s EIA data showed that the economic slowdown is taking its toll on energy demand. Over the past four weeks, gasoline demand has averaged 9.3 million barrels per day, down 2.4% from the same period last year.
“We are finally seeing the impact of weaker economies on oil prices,” said James Williams, of WTRG Economics. “It is often said that high oil prices cause recessions, but it is equally true that recessions cause low oil prices.”
Source: Crude’s Slide Continues
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.