it fell even more: bloomberg

$108

Doom DOo O OOOOm DOOOOOOOOOOOOOMMMM!!!!!!

It fell below $106.

If it breaks down below $100 and stays there, we could probably get it over with and declare a global economic collapse. Maybe.

... on the other hand, it is now rumored that OPEC's unofficial floor level (where they start to consider cutting production) is now at $100. I'd say they're just trying to protect their $1 trillion income stream for this year.

We'll see about that.

The real question is, with GOM production shut down for anywhere from two weeks to several months, how will this effect the world production total? If oil is availible on the world market the Fed's would be better off buying on the market than they would be tapping the SPR at these prices.

Not only that, but gasoline futures are down another $0.10 this morning. So is heating oil.

Look at all the currency crosses, and especially the rising dollar. Commodities across the board are also getting smacked down hard. I think the simplest explanation is more de-leveraging.

I'm relatively certain that CBOT in particular, but other exchanges also, has/have tightened margin requirements significantly since mid July. We are in an historic credit crisis. The ability to bid up on margin is not near what it was, even only months ago. Lower prices, even lower than we see now, are a distinct possibility given the parameters imposed on margin across the commodity spectrum.

Oil down $8. Dow up 240. One day after a hurrincane strikes at the heart of Gulf oil and gasoline production.

Either we're a bunch of damn fools and those who poke fun at us are right that we're crazy, or the world itself is crazy.


I've had seven calls already today and six of them could hardly begin talking from laughing their asses off at me and saying things like..."Ooooo! You better go fill up before all the gas runs out." and "Got oil?" and "You're a damned fool. Idiot." and "Get ready to pay up, you PO mutherfocker."

I put my faith in you people and now we all look like complete idiots.

If you thought oil prices were headed up in a straight line, you got bad info. This is called volatility. It's what's supposed to happen around the peak. Sometimes we have shortages and prices skyrocket. Other times we have a bit of excess supply and it looks like the good old days for a while.

PAC,

The market is dysfunctional. There's desperation in chasing tiny yields in no particular order, with rotation after rotation. Once oil gets into the double digits you can bet the farm that the effects of less petro dollar recycling will be nearly catastrophic for equities and bonds. Patience.

Bingo.



Bingo again.

Dysfunctional markets for several reasons, and some false, lame, hope that we can return to the "good old days". It's going to be a short lived thing. I agree totally with both these ideas.

It does make it tough to argue though with folks who think the world is now awash with oil and we have totally collapsed demand forever. They have big surprises coming.

Something else to remember too is that at these price levels, the demand signal is fueled again. I do believe we are already growing demand again. pup55, and DantesPeak I'm sure would agree.

Unless the world discovery picture has changed while I was sleeping it's just a matter of time.

About a month ago, our good friend Lindsey Williams says an oil spook called him and told him that oil was going to $55 on the heels of a revelation that Big Oil has been sitting on a two secret, recently discovered, resevoirs, one in the Arttic and on in Indonesia, that equals more oil than what the entire planet has used since oil was first discovered.

Yay! Go back to sleep. :D

So? Even if true (which it ain't), that would still be just one minute before clock strikes 12 instead of bells singing 12 a'clock now...