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"Oil may plunge below $25 in 2009"

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Furloughed80

Well-known member
Joined
Dec 4, 2003
Posts
409
Oil to Plunge Below $25 Next Year, Merrill Lynch Says

Friday, December 05, 2008


Crude oil prices may crash below $25 a barrel next year and gas prices could fall below $1 a gallon if the global recession spreads to China, an energy analyst and CEO said Thursday.
Demand for oil will continue to decline in 2009 as economic growth slows to its weakest level since 1982, Merrill Lynch Commodity Strategist Francisco Blanch concluded in a report.
"A temporary drop below $25 a barrel is possible if the global recession extends to China and significant non-OPEC cuts are required," Blanch was quoted by Bloomberg as saying. "In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations."
In October, when oil was trading for around $100 a barrel, Merrill predicted prices could drop to $50. Oil fell Friday to $43.64 a barrel in electronic trading.
The last time crude fell below $25 a barrel was November 2002.
Meanwhile, Gulf Oil CEO Joe Petrowski said on Wednesday that the price of oil could sink even lower — to $20 a barrel — and gasoline prices could drop as low as $1 a gallon by early next year. Gulf Oil, based in Newton, Massachusetts, is an oil wholesaler.
"The damage to the economy by the financial turmoil is much bigger than the market initially thought," said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo. "The economic data now is much worse than what we expected a few months ago."
Oil prices have fallen about 70 percent since peaking at $147.27 in July.
Dismal economic data continued Thursday in the U.S., pointing toward a sharp contraction of gross domestic product in the fourth quarter and weakening demand for crude products, such as gasoline.
The government said the number of people continuing to claim unemployment benefits last week reached 4.09 million, the highest level since December 1982, while the proportion of workers receiving benefits matched a level reached 16 years ago, in September 1992.
Factory orders plunged a bigger-than-expected 5.1 percent in October caused by big cutbacks in demand for steel, autos, computers and heavy machinery. It was the largest decrease since an 8.5 percent fall in July 2000.
On Thursday, AT&T said it was slashing 12,000 jobs, or about 4 percent of its work force. Chemicals company DuPont said it will cut 2,500 jobs and media conglomerate Viacom Inc. said it will eliminate about 850 jobs.
Investors will be eyeing the Labor Department's November unemployment report on Friday, which economists expect will show that the jobless rate rose to 6.8 percent and that companies cut another 320,000 jobs.
"It could take a while before the economy and oil prices really hit bottom," Emori said. "Oil seems headed below $40."
In other Nymex trading, gasoline futures rose 0.44 cent to 97 cents. Heating oil fell 0.67 cent to $1.50 a gallon while natural gas for January delivery slid 7.9 cents to 5.94 per 1,000 cubic feet.
In London, January Brent crude rose 7 cents to $42.35 on the ICE Futures exchange.
The Associated Press contributed to this report.
....................................
 
We had better hope it does not fall that far. Countries that rely on commodity income are some of the least stable on the planet. At the same time the US Debt obligation needs hyper inflation to have any hope of being met.

Worst case, a major World conflict. Bad case, oil not worth pumping out of the ground - which sets up for whipsaw in the other direction. Likely case - Iran, and other sponsors of terrorists will turn their full attention to raising the price of oil and thanks to Bush's Iraq quagmire, Iran is close to being a nuclear power. Russia is not one of the crazies, but they are happy to do business with them.

Oil should be around $60 a barrel. Anything less is the result of there literally being a lack of cash buyers. When you realize that oil is such a basic commodity, what's next, food?

If you have never ventured far into the third world, you really don't know what I'm writing about. But, my missionary family members have seen students trying to boil sticks to eat them.
 
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Fin must be losing money on his bad ill timed investments.

Oil should cost what its natural value. And since oil is so plentiful. So common. So unrestricted is should cost whatever it costs to get it out of the ground and transport it.

Peak oil was a Shell Oil scam in the 1950's developed to create future fears about a false scarcity which does not exist.

Either you have lost money or taken the bait. Either way your dead wrong.

Oil should be in the high teens or low twenties at the most.
 
Fin must be losing money on his bad ill timed investments.

Oil should cost what its natural value. And since oil is so plentiful. So common. So unrestricted is should cost whatever it costs to get it out of the ground and transport it.
Yes, I've lost a ton, even without playing in commodity options. Find me a buyer of any kind of equity that hasn't this year.

We agree on OPEC. The one thing I liked about Saddam is that he kept production as high as he was able and did not play well with his OPEC friends. In fact, it would not surprise me to learn that the Iraq war was much more about supporting the offspring of King Abdulaziz than the alleged WMD used as a justification.

The cost of getting oil out of the ground varies wildly, from around $8 to over $120. It is worth 0 to infinity depending on the numbers of buyers. What are you saying oil is worth?
 
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I think oil will be priced according to market demand. As emerging economies grow larger and become more correlated with the global economy; we will see large spikes and declines in demand. The only guarantee going forward is oil price volatility that exceeds historic norms.
 
Fin must be losing money on his bad ill timed investments.

Oil should cost what its natural value. And since oil is so plentiful. So common. So unrestricted is should cost whatever it costs to get it out of the ground and transport it.

Peak oil was a Shell Oil scam in the 1950's developed to create future fears about a false scarcity which does not exist.

Either you have lost money or taken the bait. Either way your dead wrong.

Oil should be in the high teens or low twenties at the most.


Brother I do agree with you but if fin is crazy line guy he is correct and I do hope what he is talking about does not happen,but it will. Even OPEC says they want it at 75 bucks a barrel. And yes i am do have stake in it going higher OXY, PBR, but would love to see me loose money for world peace.
 
One can only hope that the new administration and congress starts looking out for the interests of Americans first. Hopefully, we as a country can stop selling our national souls to foreigners in return for shiny trinkets. Lets start buying AMERICAN again and keeping livable wage jobs in this country.

This recession and the lower oil prices gives us that chance to change course.

Also, hopefully, these traitors masked as CEOs that pilfered off billions of dollars into their personal off-shore bank accounts while selling out their fellow Americans have been exposed for the scum they really are.
 
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We had better hope it does not fall that far. Countries that rely on commodity income are some of the least stable on the planet. At the same time the US Debt obligation needs hyper inflation to have any hope of being met.

Worst case, a major World conflict. Bad case, oil not worth pumping out of the ground - which sets up for whipsaw in the other direction. Likely case - Iran, and other sponsors of terrorists will turn their full attention to raising the price of oil and thanks to Bush's Iraq quagmire, Iran is close to being a nuclear power. Russia is not one of the crazies, but they are happy to do business with them.

Oil should be around $60 a barrel. Anything less is the result of there literally being a lack of cash buyers. When you realize that oil is such a basic commodity, what's next, food?

If you have never ventured far into the third world, you really don't know what I'm writing about. But, my missionary family members have seen students trying to boil sticks to eat them.


After the screwing we took this past summer >> Fuel can never be cheap enough for me. You can't tell me supply and demand had anything to do with fuel costs. We are not driving 60 percent less than we were 3 months ago.
 
Clearly the greedy, manipulating oil companies have a plan up their sleeves... They will do anything to scru us - right?

Those idiot politicians appear pretty quiet about the "greedy" oil companies nowadays...
 

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