Posted on 12/10/2014 2:10:16 PM PST by John W
NEW YORK (TheStreet) -- If investors had hoped stocks had absorbed most of the headwinds associated with lower oil prices, they were sorely disappointed on Wednesday as the commodity crash continued.
Crude prices struggled to remain above $60 a barrel with West Texas Intermediate tanking 5.1% to $60.54 a barrel after OPEC warned that demand for oil in 2015 could slow to its lowest point in 12 years. Just as oil futures stabilized midmorning, the commodity sank to new lows after the EIA reported a large increase in oil imports contributed to oversupply in domestic crude oil inventories for the week.
The energy sector was dragging on benchmark indices with the Dow Jones Industrial Average down 1.5%, or 266 points, and the S&P 500 falling 1.6%. It was the worst drop for both indices since early October. The Nasdaq slid 1.7%.
(Excerpt) Read more at thestreet.com ...
sucks to be an investor, but then stocks are long term investments.
But I’m loving the lower prices at the pump.
The Saudis think they can outlast the US shale producers. Perhaps they can, but other OPEC members can’t and will cheat.
The price will go down uncontrollably, but within a lower bound, just like when it went up. It went up and settled at around 100-110. Perhaps the new normal is 50-60?
From there the importing of oil is no longer an issue for our nation. Oil consumption at the per capita level will begin to rise. More SUVs and RVs. The price will slowly increase. The RV industry is the big winner. It is one of the few discretionary consumption decisions we have.
In the meantime the likes of BOR should be jawboning the “Speculators”, but he won’t do so on the way down.
Any that WANTS high energy prices especially oil knows nothing about the economy..
and is probably a parasite on several levels..
Is Obozo sending money to Iran, Venezuela and Brazil?
Pray America is waking
And boat owners..................I haven’t had my boat out on the water since 2009...................
Tell that to all of your neighbors who will be losing their jobs so you can save on average, about $10 a week.
most of my neighbors work in coal, and as such have pretty much already lost their jobs.
The question is why are they “hurting themselves?” The answer is quite simple: They are willing to sustain short term hurt for long term gain. Their objective in order of importance is as follows:
1. Tank the economy of Iran which is already a basket case. Iran is a terrible threat to Saudi.
2. Tank the economy of Russia which is already a basket case. Russia is an “unofficial” ally of Iran. The Russians do not like Iran but Iran gives the United States much grief and the Russians like this.
3. Tank the oil shale revolution in the United States, which they really will not be successful at. It is here to stay and will simply get leaner and meaner and more efficient due to market forces. A good example of this is the day rate for a semi submersible drilling rig in the North Sea in 1983.
1983 is when the bottom dropped out of oil field exploration. The day rate for that rig was about 25000 dollars. Today that same type rig is around 300000 dollars. If you factor in inflation the true cost of todays semi submersible is about 3 times what it was in 1983. As the Saudis “squeeze” shale oil exploration in the United States the same thing will happen. The industry will get lean and mean and more efficient. The Saudis can slow down our shale oil exploration but they will not kill it.
-— The RV industry is the big winner. -—
With the implementation of Obamacare, discretionary income has dried up. I sell discretionary products. Despite that my sales had grown 100% annually for the past three years. This year, sales are down 50%. The crash began in June.
One word - Obamcare.
Rats. I threw money into it too soon.
Yep, I see that the Iranians are crying about Saudi ‘treachery’.
Average in. Not all at once.
Now that QE has stopped it is only natural for commodities to return to lower levels. The banksters are first in line for QE so they invest in commodities and stocks, thereby inflating both. Now that the printers have stopped so has the buying, or inflating of the markets as it should be called.
Oil prices falling will also brig down the price of everything else at some point. It will cost less to produce everything, so the prices will come down.
Deflation is not a four letter word.
“Tell that to all of your neighbors who will be losing their jobs so you can save on average, about $10 a week.”
A socialist comes out from under his rock
I remember liberals and Obama claiming the rising cost of oil was a great signal. The economy was booming along as evidenced by the cost of oil and gasoline. I doubt the libs will be on air claiming the oil prices falling means lower demand and a slowing economy. NAH!!!
“Obama’s brilliant leadership and easing of oil production has lead to this wonderful news of lower energy prices.”
Will anyone in the democrat party say Sarah Palin was right when she shouted, “drill baby drill?”
Well observed. In addition to crude copper, nickel, iron ore, and other industrial commodities have pretty much hit 5 year lows.
Re: QE I was struck by a BofA report: "Bank of America said 56% of global GDP is currently supported by zero interest rates, and so are 83% of the free-floating equities on global bourses."
Those are astonishing numbers and I would argue that no one, certainly not the Fed, knows what will happen when this condition unravels.
I have a very strong position in oil equities. Does that make me a parasite?
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