"Oil may plunge below $25 in 2009"

Furloughed80

Well-known member
Joined
Dec 4, 2003
Posts
409
Total Time
3400
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.
....................................
 

~~~^~~~

Well-known member
Joined
Dec 21, 2001
Posts
6,137
Total Time
7,500+
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.
 
Last edited:

luckytohaveajob

Well-known member
Joined
Nov 17, 2005
Posts
1,114
Total Time
1+
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.
 

~~~^~~~

Well-known member
Joined
Dec 21, 2001
Posts
6,137
Total Time
7,500+
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?
 
Last edited:

Furloughed80

Well-known member
Joined
Dec 4, 2003
Posts
409
Total Time
3400
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.
 

slaquer5

Well-known member
Joined
Oct 21, 2005
Posts
1,282
Total Time
>19k
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.
 

Draginass

Well-known member
Joined
Nov 29, 2001
Posts
1,852
Total Time
5000+
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.
 
Last edited:

rajflyboy

Well-known member
Joined
Dec 19, 2003
Posts
1,797
Total Time
17500
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.
 

johnsonrod

Well-known member
Joined
Feb 25, 2006
Posts
4,218
Total Time
8000+
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...
 

slaquer5

Well-known member
Joined
Oct 21, 2005
Posts
1,282
Total Time
>19k
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.
Amen brother, OPEC says they say 75 bucks a barrel is a good price but when it was almost 150 you did not hear then bitching how they need to do something to get it back to 75. Like i said I have bought into alot off oil but would be more than glad to see me loose money :)
 

whymeworry?

Well-known member
Joined
Sep 17, 2005
Posts
701
Total Time
12000+
OPEC and Big Oil was warned time and again by world leaders that high-priced crude could lead to economic slowdowns. It happened in the past (1970s) but nobody listened to the warnings this time around as real estate prices and the global economy were roaring along.

IMO, high energy prices were the catalyst that lead to the financial meltdown. Joe Six-pack was paying more than double for his home electric bill, food, other commodity based products while getting hit for more than triple at the gas pump. Something had to give. You need food, you need to keep the lights on, you need to get to work. So the mortgage was the first to go. It was an easy decision for Joe since mortgage brokers conned him into the ajustable mortgage. One month he was paying $1200 for his house, the next $2000, and the few months after than $2900.

The financial meltdown has been blamed on subprime but as usual the media, being as inept as it is, got only one part of the story straight. Had OPEC and Big Oil moderated prices and got out of the way of its own greed, we would be look at $70 barrel oil today.

No sympathy for OPEC and Big Oil. Let them clean up their own mess.

The danger now lies in whether we as a nation follow through with our vision to transition off the black juice. I'm afraid we will lose sight of the big picture yet again and face an energy crisis in less than 10 yrs.
 
Last edited:

ThisistheDream

Well-known member
Joined
Jun 18, 2004
Posts
293
Total Time
99
I would think in the US at least the fuel demand is higher now than it was when gas was 4 dollars a gallon. Driving is cheap again and people will drive more now than they did this summer.
 

crxpilot

Waaasssuuuupppppp!!!!!
Joined
Nov 26, 2001
Posts
719
Total Time
14,000
When gas drops to $1 a gallon I would love to have a big ass tank to store it in so that when the price gets jacked back up I have cheap gas to use or sell it for a huge profit. Oh well.
 

Andy Neill

Well-known member
Joined
Nov 26, 2001
Posts
2,293
Total Time
6200
When gas drops to $1 a gallon I would love to have a big ass tank to store it in so that when the price gets jacked back up I have cheap gas to use or sell it for a huge profit. Oh well.
...and the thing that is stopping you is......?
 

rajflyboy

Well-known member
Joined
Dec 19, 2003
Posts
1,797
Total Time
17500
When gas drops to $1 a gallon I would love to have a big ass tank to store it in so that when the price gets jacked back up I have cheap gas to use or sell it for a huge profit. Oh well.

No Doubt
 

lookin4better

Well-known member
Joined
Apr 11, 2005
Posts
6,970
Total Time
Glory
I wish we could hedge gas for our cars! I saw $1.40 a gallon the other day!
 

blzr

Well-known member
Joined
Sep 6, 2002
Posts
1,502
Total Time
5500
Is Obama till going to try and pass the "Windfall Tax" that is supposedly a big part of his economic plan?

Jetflier would now have to agree that JUST THE MENTION of drilling for our own oil scared the market enough to drop the price of iol by $110 in less than 6 months! The natural resources of this country are huge and largely untapped. The SHEEP in society will believe the chicken-little's of the world, but those in power know differently and THEY control the markets!

I just hope we can tap just a little of the oil off the west coast. It would prove to be very stabelizing to the world oil market..IMHO>
 
Top