Oil Off Sharply
May 18th, 2009 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market on Friday, crude for June delivery fell back, closing at $56.34/barrel, down $2.28. June reformulated gasoline dropped 4.31 cents, to $1.6806/gallon.
Friday’s result left crude down by 3.9% on the week, following a 10% rally the week before.
After reports that OPEC ratcheted up oil production in April, the first month in eight in which the cartel has increased output, Commerzbank analysts commented that, “Rising oil prices increase the incentive to expand production at the expense of other oil producers, in order to benefit from higher oil prices.”
“A weaker demand and higher OPEC supply may explain why oil stocks have been rising until recently,” the bank’s analysts added. “This also confirms our conviction that the oil price increase during the last weeks was overdone and a price correction toward $55 a barrel had to be expected.”
And natgas followed last week’s sharp gains with equally sharp losses, ending Friday at $4.098 per million British thermal units, down 5.2% for the week.
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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.