Crude Up Slightly, Drops Below $60 but Recovers
Nov 11th, 2008 | By Doug Casey | Category: Financial NewsIn the energy market Monday, oil eked out a small gain, with crude for December delivery closing at $62.41/barrel, up $1.37 from Friday. December reformulated gasoline added a penny and three-quarters, to $1.3679/gallon.
Early in the day, crude had fallen to $59.10, its lowest level since mid-March, 2007. But every time crude goes “to a new low, a light round of buying emerges to push it up a bit,” said Darin Newsom, a senior analyst at DTN.
Phil Flynn, of Alaron Trading, responded to the Chinese news by calling it “a lot of stimulus that the market wasn’t expecting … It’s a two-year project, and it will increase energy demand from China.”
Flynn added that any gains may not be sustainable, though. “China has gone from having to slow their economy to having to boost it,” he said. “The market is still trying to determine the extent of the global economic downturn. In the meantime, we remain in a trading range, trying to break higher into the [$70 a barrel range] or breaking down in the $50s.”
The big factor is OPEC’s “pledge to cut production even deeper if prices are not in the $70-$90 range,” says Kevin Kerr, editor of Global Commodities Alert. “Giving that threat some teeth is the fact that the Saudis seem to be on board with the cuts.”
Kerr added that it’s clear OPEC is “fearful of an Obama presidency and what the longer-term impact to their industry will be,” and said the cartel will likely “vigorously defend the $60 level.” ”
Source: Crude up slightly - Drops below $60 but recovers
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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.