Weakening of the value of the dollar is going to keep the price firm. It may go back down to 100.00, but it really is all about the dollar and the strength of other international currencies right now.

Excellent. Count me in for 50g if he responds. Thanks.

the price just dropped about $7. CNBC is stating ,struggling US Banks are dumping long positions in OIL/enegry sector to raise cash/capital.

Sure thing.

Gas prices should be coming down any time now.

What's developed today is generally called a 'buying opportunity' folks.

But will it happen at a rate greater than supply decline? Also, if prices drop like you say, demand destruction gets reversed.

I think the only real solution is large scale rollout of electric cars along the lines of the Chevy Volt. Basically just ban the sale of new gas-powered cars. All government cars will be brand new electrics to get some economies of scale happening for the automakers. Old gov gas cars are scrapped not sold. This would instantly start eating into oil demand. After a few years make it illegal to buy even a used gas-car, there'll be used electrics around by then and gas cars will begin to be completely phased out. Get all the gas cars off the road and we'll have plenty of oil supply left for farming, air travel, freight etc. It absolutely has to be done, no matter how much it hurts.

It'd be expensive but probably not as expensive as the Iraq war. Electricity grid would need to be expanded, but remember there is much offpeak electricity capacity going to waste while everyone is asleep.

I actually think this may be the start of a big drop. Each of the last 5 bull runs has gotten progressively weaker (called a bearish MACD divergence). This one barely made it up to the high from the last run. Natural gas and coal both had big downwards corrections of maybe 20% two weeks ago and oil may be heading there soon also. The 200 day moving average would stop it at around 105-110 and I wouldn't expect it to go below that. This thing could also have a blow off top left in it though to spike up above 150 before it falls.

Take all of the "economic theories" of the last 100 years and throw them in the toilet where they belong.

My best guess is that we're in 8% decline, worldwide, by late 2009 at the latest.

So ask youself this . . .

Is "demand destruction" going to drive the price lower when the halving time of world production is nine years?

People, figure this out.

Oil is what is used to make food, to transport food, to heat, to pretty much do all of the required things in life.

"Demand destruction" will not offset an 8% decline because oil is used for so many critical processes.

Barring government screw up, oil can only go up. The only question is . . .

"At what price of oil will farming with horses be more economical."

When you find that price, you've found the top.

Oh nothing would surprise me in this business. But bear in mind, if oil reaches $100 or thereabouts SUV sales will pick up again and lines of happy truck buyers will form at our local Dodge truck dealers.

$2.75 gasoline will return and all will be well with everything!

My point is: Don't bet on it.

Not saying that this is the top by any means, but markets surge and then correct. This one is way over due for a correction back to the 200 day moving average.

I like days like today. When the clueless see the price droping it allows them to hang on to their disbeliefs that much harder. It washes the rug out from under Simmons in their eyes. To them its all cycles. They just have to make it through this one then it's happy days are here again time.
These are more of doomsdays than when prices are skyrocketing.
It gives false hope.

The Iran issue adds at least $10,if not $20 to a barrel of oil. Geopolitical factors is a big part of the price.
Whether we import 12 or 15 million bbls a day.
If we burn less ,India and China will burn it up, no problem.
So much of what is happening is the fact thst America doesnt wag the dog anymore. What is happening to America now... isnt that much different than the financial collapse of the former USSR did in 80's. The modern American economy is so huge and deverse, it just taking longer.
The US Dollar also hit a record low against the Euro today.
Whatever American money in stock/commodity markets do to the price of Oil in terms of manipulation is less significant now yjan anytime in history.5% to the price of a barrel tops.
The Bejing torch gets blown out 08/24. Look for some Iranian dust to get kicked up shortly there after.

SPG - with the exception of medical issues, I agree with almost all of your posts.

I disagree with this one.

I'm not saying it's impossible for a turn down, but I am saying that the paradigm you are applying to arrive at your conclusion does not apply to oil.

200 day moving averages don't, to me, mean anything for a commodity that is about to fall off a production cliff and for which no alternatives exist.

People - we get to live through the most critical, non-religious, event in human history, and it's a one-time only thing! Glorious. Especially if you're the 1 in 10,000 who can see the event for what it is while it is happening.

Fair enough, and you may be right. The problem though, is why does a commodity that is in the situation you described have an $8 dollar drop in one day? As far as I can see, the laws of supply and demand haven't been repealed yet.

Instability. The more pressure that is put on a system, the more unpredictable it becomes at a breaking point. And the higher this one gets, the more there will be people holding large contracts that they can sell and make (or lose) very large dollar profits (losses); the more jitter is observed, the more people will try to guess $20 high, $20 low.