Posted on 11/20/2008 10:26:07 AM PST by NormsRevenge
NEW YORK (Reuters) – Oil dropped more than 3 percent on Thursday, touching the lowest level since May 2005 as record U.S. job losses intensified concerns of a long and deep global recession and further crushed demand expectations.
The U.S. government reported the number of workers making new claims for jobless benefits last week surged to the highest in 16 years, helping to push down global equity markets.
U.S. crude fell $1.81 to $51.81 a barrel by 1251 p.m. EST after earlier touching $49.75, marking the lowest level since May 25, 2005, when prices hit $49.58.
London Brent crude shed $1.39 to $50.33 a barrel.
"The unemployment data was yet another ugly data point in a seemingly never ending stream of poor economic numbers," said Michael Wittner, global head of oil research at Societe Generale.
"What makes it hard to call a bottom is that even when oil fundamentals firm up, if we're still having these waves of deleveraging it can overwhelm even the oil fundamentals."
Oil has tumbled nearly $100 from record highs over $147 a barrel struck in July, as the economic crisis strangles demand growth in large consuming nations such as the United States.
(Excerpt) Read more at news.yahoo.com ...
Perfect, just in time to justify increasing gas taxes.
/democrat
Funny, nobody in the media ever mentions “conservation” as one cause for reduced demand or “Drill Here, Drill Now” as a cause for the bursting of the oil bubble.
I am not an economist but somehow I doubt that people chanting "Drill Here, Drill Now" caused a decrease in demand for oil in China and India.
However, with oil at under $50,00 there will be little incentive to expand E&P in the United States.
I am not an economist but somehow I doubt that people chanting "Drill Here, Drill Now" caused a decrease in demand for oil in China and India.
However, with oil at under $50,00 there will be little incentive to expand E&P in the United States.
Thus if you want to Drill Here, Drill Now, you will need to have oil at least $85.00 if not $100.00.
And also a great time to start buying oil again for when it goes up. Oil will likely languish in the $40 range for quite some time but eventually it will come back.
Yes, it is time to buy as much oil as possible from from foreign sources and put it in the Petroleum Reserves.
it will go up when the economy goes back up...won’t happen with obama in charge
The article listed reductions in the U.S. as a reason for the decline.
Oil’s decline began the day Bush lifted the executive ban on offshore drilling. Much of the “demand” has been fabricated by the enivowacko movement and those invested in alternative technologies (which are often the same people).
I have no desire for oil to be high to achieve “Drill Here, Drill Now.” Just the threat of increased domestic drilling knocked the top off the bubble, imo.
Quite the prick, indeed. Thanks!
Hoarding of oil, and other commodities, was one reason the prices increased so drastically.
Even China understands that much.
China Expands SPR Facility As Crude Falls
http://www.energytribune.com/articles.cfm?aid=1026
But we haven’t added to ours since July.
http://www.spr.doe.gov/dir/dir.html
Stocks of oil did not increase prior to the run up of oil.
“Oil’s decline began the day”
All futures traded commodities (except gold) decline began several months ago when the hedge funders and others stopped parking money in options and cashed out.
Their holdings are now cash, dollars, notes, yen.
The thinking is that 9 months from now they will start parking their money back in commodities trades and, hopefully, American stocks.
All these headlines about end user “demand” causing recent price major trends are from journalistic hacks. Their depressing and inaccurate headlines help talk down the economy, but nowhere near as much as Paulson’s and Bush’s rambling statements on the economy.
Actually, the price of oil is not solely determined by demand in the U.S. but also the world demand. And as there is less demand for oil on the World Market, the price of oil will fall.
Oil’s decline began the day Bush lifted the executive ban on offshore drilling.
So, you mean that the price of oil would not have gone up to more than $140.00 a barrel if President Bush had lifted the executive ban on offshore drilling 2001, 2002, 2003, 2004, 2005, 2006 or 2007?
I have no desire for oil to be high to achieve “Drill Here, Drill Now.”
Sorry, but you cannot have both expanded domestic E&P and cheap oil. In order to make it profitable to expand domestic E&P we will need to have oil at far above $50.00 a barrel. You see, people in industry would like to make a profit when drilling for new sources of oil in the United States!
Are those numbers for China and India? Not arguing, just asking.
What do you think the price of oil should be?
Has the demand really dropped that much since it was $4/gal?
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