OPEC Caught in a Bind
Nov 4th, 2008 | By Doug Casey | Category: Financial NewsIn the energy market Friday, oil tumbled, with crude for December delivery closing at $63.91/barrel, down $3.90. December reformulated gasoline arrived as front-month contract by slumping 13.3 cents, to $1.3625/gallon.
“Oil prices and [their] moves this year have reflected times of historic upheaval in the world economy,” wrote Phil Flynn, of Alaron Trading. This is “all about the price of oil adjusting itself to a new world economic order and the price of oil adjusting to the fears and the constantly evolving economic crisis.”
OPEC will have to be part of that adjustment, and the cartel is caught between the proverbial rock and hard place.
Mark T. Williams, of Boston University, notes that “the real story is how will OPEC react, and will they become more aggressive in restricting supply.”
Williams continued, writing of the cartel that: “Should they become more aggressive in supply quotes, how will this impact the economy? In particular, the global economy is vulnerable and such OPEC-imposed quota restriction could push the economy in even a deeper recession, further pushing down oil prices.”
Source: Oil Plummets Again, OPEC Caught in a Bind
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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.