Crude Prolongs Slide
Dec 18th, 2008 | By Doug Casey | Category: Financial NewsIn the energy market Wednesday, oil prices plummeted, with crude for January delivery closing at $40.06/barrel, down $3.54. January reformulated gasoline fell 3 cents, to $1.01/gallon.
Crude sold off despite OPEC members’ decision to slash production by 4.2 million barrels a day from its actual September production level of 29.045 million barrels a day, effective January 1. That’s a drop of 2.2 million barrels from current levels, and it constitutes the cartel’s biggest production cut ever.
The market’s counterintuitive reaction “is, you said you’re going to cut [production], but we really don’t believe you,” said James Williams, of WTRG Economics. “Also, we are looking forward to the low spring demand season in a few months and even if they [OPEC] cut a full 2.2 million barrels, it is not going to be enough to balance the market by then.”
$25-30 a barrel is probably as low as oil prices could go unless the economic situation gets “much, much worse,” Williams said. “Could [oil] drop to $10? Yes, but it wouldn’t stay there for long, because at $10 per barrel, OPEC will get discipline,” he added.
In its weekly inventory report, the Energy Information Administration said crude supplies rose 500,000 barrels during the week ended December 12. Gasoline stocks climbed 1.3 million barrels and distillates were up 2.9 million barrels.
Advertisement
$592 Trillion Phantom Economy Blows as Latest Demon Derivative Unwinds
The worst demon derivative to date is about to whip down Wall Street...leveling what little is left! Over 700 banks (with trillions of dollars in assets) will come crashing to the ground. Hundreds of hedge funds will collapse. Corporate bankruptcies will soar. And another $20 trillion will be wiped off global stock markets. But this one bombed out investment will soar two to ten fold as the world comes undone.
Find out the entire story from the investment group who eerily predicted the current crisis "to a T!"...
Click here now and find out how to get started...
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.