Oil Falls Back
Dec 10th, 2008 | By Doug Casey | Category: Financial NewsIn the energy market Tuesday, oil prices sank, with crude for January delivery closing at $42.07/barrel, down $1.64. January reformulated gasoline dropped 2 cents, to $0.94/gallon.
“Nothing over the last few days has changed the bearish fundamentals of the oil market, so we expect markets to remain fragile until we either see demand start rising — which we do not expect any time soon given the current economic condition — or large cuts by OPEC next Wednesday,” wrote Nimit Khamar, of Sucden Financial Research.”
Underscoring the demand destruction, the Energy Information Administration said in its monthly short-term energy outlook that the current global economic slowdown is now projected to be more severe and longer than it expected last month.
The EIA now projects that world GDP growth will slow to 0.5% in 2009, down from its expectation of 1.8% growth in last month’s outlook.
That means that, “Under current economic assumptions and assuming no major oil-supply disruptions, WTI [West Texas Intermediate crude] prices are expected to average $51 per barrel in 2009, down from the $63.50 projected in last month’s outlook,” the EIA wrote.
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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.