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Politics & ReligionWell Since every damn forum has one. Might as well leave it out there. This place is loosely moderated and should not be entered if you're weak of heart.
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.
NICE! I wonder how many SUVs will get sold with sub $1 gas at the pumps. This is going to save the big 3!
Seriously, though, people are so short-sighted I bet they will snap up gas-guzzlers if this really happens...
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"The central conservative truth is that it is culture, not politics, that determines the success of a society. The central liberal truth is that politics can change culture and save it from itself." -Daniel Patrick Moynihan
I'm interested in seeing the impact of a global oil crash on the middle east and terrorism in general.
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"The central conservative truth is that it is culture, not politics, that determines the success of a society. The central liberal truth is that politics can change culture and save it from itself." -Daniel Patrick Moynihan
NICE! I wonder how many SUVs will get sold with sub $1 gas at the pumps. This is going to save the big 3!
Seriously, though, people are so short-sighted I bet they will snap up gas-guzzlers if this really happens...
Funny, but I was thinking the same thing. However, selfishly, I was also thinking about the SUV's at the dealer near me: 0% ----72months.
That will change soon I think
__________________ Kebbleesta.
i just put my pipe on. now I'm exhausted
Seriously, though, people are so short-sighted I bet they will snap up gas-guzzlers if this really happens...
My GTO is a "gas guzzler" and it has nothing to do with being short-sighted, it has to do with driving what I want to drive. I can afford the gas, and could even if it was $8/gallon.
My GTO is a "gas guzzler" and it has nothing to do with being short-sighted, it has to do with driving what I want to drive. I can afford the gas, and could even if it was $8/gallon.
Good for you! Clearly you are not the sort of person I was referencing. I was talking more about the soccer mom who "had to have" that escalade to tote her one kid around, then pisses and moans about the $100 fill-ups every week. Many people can afford to drive an 18mpg goliath when gas is cheap, but not when it's expensive.
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"The central conservative truth is that it is culture, not politics, that determines the success of a society. The central liberal truth is that politics can change culture and save it from itself." -Daniel Patrick Moynihan
My GTO is a "gas guzzler" and it has nothing to do with being short-sighted, it has to do with driving what I want to drive. I can afford the gas, and could even if it was $8/gallon.
Just curious what gas prices were when you first bought your Goat?
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Gasoline was pushing $5/gallon around here when I put a new engine in the old van. Dumb? Yeah, probably.
The price of oil is doing what commodity prices do- collapse when demand collapses. When the economy recovers, and it will, the price of oil will rise with it. If this is a long, deep, nasty recession worldwide, the price of oil could go well below $25/barrel. If the economy comes roaring back, the price of oil could climb back over $100 fairly quickly.
We discount Keynesian economics, but the price of oil is behaving almost like the government counterbalance Keynes suggests. It spikes and kills the economy when things overheat, then it tanks when the economy tanks. High prices and disruptions were a big part of why we had such a nasty time in the 1970s, and then we got away with economic irresponsibility after about 1983, in part because the price of oil didn't spike with respect to the economic cycles. There are plenty of other more important reasons for why the economy overheated like it did and then crashed like it did, but oil prices were spiking at about the time the whole mess came to a head. Low oil prices are going to be part of what bails us out, no matter who's in power or what policies are in place.
Something to think about- if we weren't so dependent upon oil, we would be insulated from these fluctuations and our personal and collective behavior would be the reason for economic cycles.
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Member in good standing of the global elitist agenda
Good for you! Clearly you are not the sort of person I was referencing. I was talking more about the soccer mom who "had to have" that escalade to tote her one kid around, then pisses and moans about the $100 fill-ups every week. Many people can afford to drive an 18mpg goliath when gas is cheap, but not when it's expensive.
Pissing and moaning just makes them whiny bitches. But they still were able to afford it just fine and were still driving the vehicles they wanted.
Gas to plummet below $25 a barrel next year
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