Oil Slightly Lower
Feb 5th, 2009 | By Doug Casey | Category: Financial NewsIn the energy market on Wednesday, oil slipped lower, with crude for March delivery closing at $40.32, down 46 cents. March reformulated gasoline added 5.14 cents, to $1.2184/gallon.
In its weekly inventory report, the Energy Information Administration said that crude supplies shot up 7.2 million barrels in the week ended January 30, much more than analysts’ expectations for a build of only 2.9 million barrels.
That’s “very bearish for crude oil,” said James Williams, of WTRG Economics. “The only thing for the bulls is the prospect that OPEC will make additional cuts in March.”
The EIA also reported that gasoline inventories rose by 300,000 barrels while distillate stocks fell by 1.4 million barrels. Refineries were operating at 83.5% of capacity last week, up from the previous week’s 82.5%.
Despite OPEC’s cuts, some see further downside in the sector. Analysts at Morgan Stanley (NYSE:MS) said yesterday they expect oil prices to average $35 a barrel in 2009 and fall to a low of $25 a barrel in the second quarter, “as global demand is poised to post its largest year-on-year contraction since 1982 on a sputtering global economy.”
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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.