Article

2007-01-19 Home Front Economy

Crude below $US50 could bring price collapse

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Posted by Fred 2007-01-19 00:00|| || Front Page|| [2 views since 2007-05-07] Top

#1 Big oil does not allow price collapses.

Posted by Sneaze Shaiting3550 2007-01-19 05:50|| 2007-01-19 05:50|| Front Page Top

#2 That's tooooo baaaaaad.

Posted by gromgoru 2007-01-19 06:50|| 2007-01-19 06:50|| Front Page Top

#3 it could trigger a further wave of put short hedging which would give additional negative momentum

Translation: "We are SO screwed...."

Does anybody remember after the post-Katrina price hikes settled down how we were told $2.50 a gallon was forever and we'd better get used to it? In all honesty, I think this is going to only be a respite, but I intend to enjoy it.

Mike

Posted by Mike Kozlowski 2007-01-19 07:13|| 2007-01-19 07:13|| Front Page Top

#4 I hope those bastards lose their shirts. Monkeying around with oil prices affects every single working class person in the country, but they don't give a rat's ass. They even go so far as to drive the price of heating oil and gas up to make a buck. And that's a real dog act in my book.

Posted by bigjim-ky 2007-01-19 07:56|| 2007-01-19 07:56|| Front Page Top

#5 My "Mad Mullah" Brothers in Iran might have a couple of problems with oil under $50 also. Seems that little commodity is their 'line-of-credit', for which they are currently vastly overextended. Their 'creditors (Russia, China, Phrance, whomever else) might just want their 'pound of flesh' if the trend continues. Suddenly your 'futures' don't look so good on paper. The Iranian citizenry will subsequently suffer more.

Posted by Mullah Richard 2007-01-19 08:35|| 2007-01-19 08:35|| Front Page Top

#6 I hope these investors all lose their asses!!! While we are struggling to make ends meet because of 2 to 3 buck a gallon gas, these wall street types were lighting their cigars with 100's. I hope they suffer.

Posted by 49 Pan">49 Pan 2007-01-19 08:46|| 2007-01-19 08:46|| Front Page Top

#7 Gives me a warm fuzzy.

Posted by DarthVader">DarthVader 2007-01-19 09:50|| 2007-01-19 09:50|| Front Page Top

#8 1 - I hope someone is out there watching the system to insure all the speculators who drove the price up are not allowed to get out of their contracts. Though the cynic in me assumes that political and banking interests are going to protect their buds and contributors.

2 - The Sauds are intentionally doing this as a weapon against the Iranians. When the Iranian threat diminishes, you can count on the Sauds cutting back on production. Once again we'll pass up a window of opportunity [see its not just a Paleo affliction] to bring our own resources on line.

Posted by Procopius2k 2007-01-19 09:57|| 2007-01-19 09:57|| Front Page Top

#9 Also, low prices make domestic sources and alternatives less attractive. The Saudis don't want us weaning ourselves.

Posted by Rob Crawford">Rob Crawford 2007-01-19 10:11|| http://www.kloognome.com/]">[http://www.kloognome.com/] 2007-01-19 10:11|| Front Page Top

#10 W can make the case for higher taxes, tho I am lo to say it.

We can absorb this quite easily.

Posted by anonymous2u 2007-01-19 11:20|| 2007-01-19 11:20|| Front Page Top

#11 I've always thought that 5 bucks a gallon was not too high a price to see those barbarins go down for the count, but the then 25 cents a gallon would also be good:-))

Posted by kelly 2007-01-19 13:36|| 2007-01-19 13:36|| Front Page Top

#12 I wonder if this is intentional or just a serendipitous change in the weather.

Aside from the West losing the incentive for domestic energy production, I see nothing but wins for us.

It essentially bankrupts Iran and Venezuela. I don't know how well Saudi and Kuwait, et al will hold up with the lower prices, but it seems like an additional economic pressure on the Iranian/Venezuela thugs. And by extension, robs North Korea of a rich ally.

*shrug* I just hope all the good outweighs the bad.

Posted by Anon4021 2007-01-19 13:53|| 2007-01-19 13:53|| Front Page Top

#13 Anon4021: *shrug* I just hope all the good outweighs the bad.

What will happen will happen. All I know is that everyone else doesn't worry about balance of good and bad of THEIR actions, doing what they damn well please, followed by demands that those with a better track record of success pay for their failures.

Posted by Ptah">Ptah 2007-01-19 15:17|| http://www.crusaderwarcollege.org]">[http://www.crusaderwarcollege.org] 2007-01-19 15:17|| Front Page Top

#14 I can't believe Big Oil let it drop so quickly. Perhaps they were in the MotherShip.

Posted by Shipman 2007-01-19 18:09|| 2007-01-19 18:09|| Front Page Top

#15 A year or so ago I said that these huge prices hike would be only temporary, and they were.

Cartels such as OPEC only work for so long, then their power is overwhelmed by the actual market.

Read history and study oil prices as I did, and you will see that oil prices must be propped up on low supply or by articial ( meaning government ) means such as regulations that affect oil directly.

Low supply and high prices always mean new investment will seep into the oil market until such activity an no longer be sustained, such as when production increases.

Once the spigot is enlarged is it very hard to slow it down until supply, or interference in the market forces a change in investment due to falling prices.

The history of oil prices has always been deflationary. It is impossible to see high oil prices beign sustained for too long without some kind of intervention ( taxes or regulation)

Oil is finding its new permenant equilibrium and there will be a shakeout until that new level is reached.

Posted by badanov 2007-01-19 18:39|| http://www.freefirezone.org]">[http://www.freefirezone.org] 2007-01-19 18:39|| Front Page Top

08:09 The Don
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