Crude Had Widly Divergent Day
Dec 22nd, 2008 | By Doug Casey | Category: Financial NewsIn the energy market Friday, oil prices went haywire, with crude for January delivery closing at $33.87/barrel, down $2.35 on its last day as front-month contract, while crude for February delivery closed at $42.36/barrel, up 69 cents. January reformulated gasoline gained 5 cents, to $0.97/gallon.
Such a wide gap between near month contracts is unusual.
But, “The last standing bulls are rolling over” to buy the February contract while “dumping their January oil on the market,” said Phil Flynn, of Alaron Trading.
Meanwhile, OPEC President Chakib Khelil said that the cartel could continue to slash its output, beyond the 2.2 million barrel/day cut already agreed to.
“We will continue this reduction until the price will stabilize,” Khelil said, while adding that, “We feel very strongly that what happened in 2008 and what’s happening now is due in great part to the speculation.”
And Saudi Arabian Oil Minister Ali Naimi reiterated that $75 a barrel was a “fair and reasonable” price for oil. We shall have to see whether the market agrees.
Source: Crude has wildly divergent day
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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.