Half-priced oil by end of year?

[babylonsister]

Half-priced oil by end of year?

The drop in energy prices has eased fears of prolonged sticker shock, and some say oil may hit $70 a barrel from a high of $145.

By JAD MOUAWAD, New York Times

Last update: July 29, 2008 - 10:27 PM


The sharp drop in energy prices since the beginning of the month is turning into a rare bright spot in a bleak economic landscape.

For the moment, at least, fears of a prolonged energy shock seem to have subsided a bit.

Oil has fallen more than $23 a barrel, or 16 percent, since peaking July 3. Gasoline has slipped below $4 a gallon and is dropping fast as Americans drive less. Natural gas prices, which had risen the fastest this year as traders anticipated a hot summer, have shed 33 percent since the beginning of the month.

Crude oil prices extended their decline, falling 2.5 percent, to $122.19 a barrel, their lowest level since the beginning of May. This helped spur a rally in the stock market, with all major indexes rising more than 2 percent. But stock markets still remain close to the lows of earlier this month.

It comes after an equally sharp correction in the prices of many agricultural commodities such as corn, wheat and rice, which took place a few weeks ago. These moves suggest to economists that global markets, in a near-panic early this year to find prices high enough to allocate scarce supplies, overshot and bid prices too high.

Commodity prices remain extraordinarily high by historical standards. But with the economy weakening amid a housing crisis and a credit crunch that show few signs of improving, many traders have begun to believe demand for oil and other commodities will soften worldwide.

Investors became net sellers in the oil market last week for the first time since mid-February 2007, according to Barclays Capital.

more...

http://www.startribune.com/business/26082769.html

[bryant69]

1. That would be nice.

We'll have to see though.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[dysfunctional press]

2. anybody who makes that prediction ought to be out shorting oil futures...

wanna bet they don't...?

[fl410]

4. Gotta love these hotshot "analysts" who get paid to predict crap they would never ever

risk their own investments in.
:eyes:

[fl410]

3. It's back up $4 today. No way in hell will it ever drop below 100 again.

Oil is not like coffee or peanuts...which can be replenished in a growing season.

[Javaman]

5. Stupid will follow stupid...

as soon as the mouth breathing public gets low prices at the pump, they will forgo the recent progress toward mass transit and drive again, thus driving up the of gas at the pump.

[n2doc]

6. Election time!

Like clockwork. Expect it to drop to ~100, maybe 90. I would not think they will be willing to give up enough profits to bring it to 70, though. Then after the election, jack it up again.

[DailyGrind51]

7. Sure, by then a Democrat will have been elected President with

a clear Democratic majority in both houses.;-)

[MadHound]

8. Umm, no

Chinese and Asian demand won't allow this to happen, and frankly I doubt that we'll ever get below $100/bbl oil again. Sure, we'll see lower prices this fall and winter, we generally do. Gas might even go back down to $3.29 a gallon. However next summer gas will jack right back up to four a gallon and beyond, it's the same cycle of gas pricing we've been seeing for the past ten years.

Oh, and after the Olympics, when all those idled factories and cars in China are free to fire up again, we'll see oil start to rise.