Oil Plunges
Apr 21st, 2009 | By Doug Casey | Category: Financial NewsIn the energy market on Monday, oil posted its biggest one-day loss in seven weeks, with crude for May delivery plunging to close at $45.88/barrel, down $4.45. May reformulated gasoline fell 8.08 cents, to $1.4119/gallon.
With the May contract losing front-month status today, there will likely be additional volatility in the market as speculators who don’t want physical oil have to sell the contract before expiration to avoid taking delivery.
Phil Flynn, of Alaron Trading, sees “more choppiness” as expiration approaches, however “if the stock market stabilizes, we’ll see the price of oil start to come up,” he said.
“Justifiably anxious over the global economy, now in the throes of the most serious economic calamity since the 1930s, [the energy market] attaches to the slightest glimmer of hope signs of a nascent recovery,” said Michael Fitzpatrick, of MF Global (NYSE:MF).
Analysts at Goldman Sachs (NYSE:GS) disagreed, writing that they expect oil prices to fall to $45 a barrel in the near term, “as lower prices will be required to shore up demand while keeping supply off the market.”
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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.