Crude Pulls Back
Sep 3rd, 2008 | By Doug Casey | Category: Financial News, Oil Investment & Alternative EnergyIn the energy market Tuesday, crude for October delivery plummeted, closing at $109.71/barrel, down $5.75 from Friday. October reformulated gasoline fell 12 cents, to $2.7337/gallon. That Hurricane Gustav spared Gulf drilling facilities was important, but “There’s no question … that the market psychology has flipped and investors are running for the door,” said Michael Lynch, of Strategic Energy & Economic Research.
“Provided oil firms return to their production facilities relatively soon and Gustav fades away without any significant damage to energy production in the area, it is very likely that investors will be paying very close attention to OPEC’s regular meeting on September 9,” wrote Andrey Kryuchenkov, an analyst at Sucden Research.
“The primary issue is when OPEC will cut production, and what price they will try to defend,” Lynch wrote. “The hawks will push for a defense of $100, but they are less likely to cut production significantly … The Saudis appear ready to defend $80 and when they cut, it should put a floor on the market.”
And mind the season, says John Person, of NationalFutures.com. “Crude oil has … [declined] through mid December [in] 20 out of the last 25 years,” he says. “That is an 80% success rate to trade the short side or stay out of the market until end of year.”
Source: Crude pulls back - Gustav spares oil platforms.
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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.