You should all celebrate as oil cuts through $90 a barrel, to the downside. This is a premonition of things to come.
“You all”, of course, is excluding anyone who levered long oil as it crossed $100 coming off of a recession.
What, did you think we’d rush back to $150 like it’s 2008? Who has the money to afford that sort of nonsense!?
But have no fear; your future contracts for oil delivery will be used for the benefit of the country, as you’re forced into fire sale liquidations, creating a most lovely supply glut to the cheers of refineries and industry everywhere.
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Good call on crude. I will be SHOCKED if we trade below $85, however.
I think we see $60 before we see $120 again.
The only way we see $60 is with massive deflation, wherein Detroit will officially become the set of Escape from New York/LA.
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I will buy $UCO at 85 and again at 80 if oil falls that low. The OPEC countries will not allow oil to go much lower than that unless we have total demand destruction. The cost of drilling has gone up so at $60 they better leave the oil in the gound and wait for better pricing.
It’s not just about the price of oil. It’s about volume.
If OPEC members have any aspirations to maintain programs and spending levels, they don’t have a choice.
Supposedly with the latest round of bribes errr I mean “social programs” in Saudi Arabia, they need close to $90 oil to pay for that shit. There’s plenty of supply out there, but an ever increasing percentage of it is heavy / sour junk.
Like Fly says, $85 is a good possibility. Probably see it drop through that level just to scare the shit out of OPEC people and speculators. But $60? Doubtful. Perhaps we just go back to the 2009 – 1H 2010 range of $75 to $85.