Oil Drops over 30% since summer, now what?

NoTrespassing · Dec 12, 2014

WTI = 57.66, Brent = 61.67, the report I heard said it dropped over 13% this week.

MinnesotaEric · Dec 12, 2014

NoTrespassing said:
WTI & Brent are both down over 4% today. That's a big deal when your government depends on 75% of it's income from oil like Venezuela. There are some countries in big trouble right now. Russia has to be feeling this big time too even though they claim they aren't.

Kevin

Kevin, several years ago an energy trader shared that when energy prices were low, there was more peace in the world because the cost to produce food was also lower, and oil money wasn't available for wars. Today, or this week, I should say, oil is down because it is assumed that weak hands in the oil patch will do everything they can to up production in order to milk existing wells and sell into a declining market. Goldman and Morgan Stanley both expect oil to trade in $50-80 next year and I've seen people claim a low of $20.00 as the market overshoots on the downside for a variety of reasons.

What that means is that shrewd investors are looking to a 2-4 handle next year getting long oil.

houstonscott · Dec 12, 2014

More oil reserves coming onto market, developed over last 10 years. Fracking success. Technology makes oil gas production a 10,000 year reserve, renewable if you will, unlimited. US and world economy slowing. Unemployment at 23% in USA. Demand drops off. Price drops! Simple. HS

KiotiKowboy · Dec 12, 2014

houstonscott said:
More oil reserves coming onto market, developed over last 10 years. Fracking success. Technology makes oil gas production a 10,000 year reserve, renewable if you will, unlimited. US and world economy slowing. Unemployment at 23% in USA. Demand drops off. Price drops! Simple. HS

Nice to see someone posting ACCURATE unemployment numbers.

MinnesotaEric · Dec 12, 2014

KiotiKowboy said:
Nice to see someone posting ACCURATE unemployment numbers.

Everybody on the street is aware of the TRU unemployment numbers but the fact is we have full employment of people who want to work somewhere at 4-6% factoring the GovCo way.

Source: Alternate Unemployment Charts

MinnesotaEric · Dec 12, 2014

Time to start overlaying charts lining September 30, 2007 up with October 31, 2014.

Egon · Dec 12, 2014

It would not be inflation control would it?? With the added benefit of allowing folks that sold shares high buy them back low?

mjarrels · Dec 12, 2014

Funny, the government is using low fuel cost to show slow inflation but when using numbers for increased inflation... fuel cost is not included!

mark

houstonscott · Dec 12, 2014

mjarrels said:
Funny, the government is using low fuel cost to show slow inflation but when using numbers for increased inflation... fuel cost is not included! mark

Actually many think we are in a deflation situation right now, before massive inflation happens, and the government bankruptcy becomes reality for the low information types. HS

KiotiKowboy · Dec 12, 2014

houstonscott said:
Actually many think we are in a deflation situation right now, before massive inflation happens, and the government bankruptcy becomes reality for the low information types. HS

Our official debt is now over 18 TRILLION. The "O" has added about 7 of those TRILLIONS.

The fact is - the debt will never, get that NEVER N E V E R, be repaid - not in your lifetime - not in your children's lifetime - not in your great great great grand children's lifetime - N E V E R. When the dollar "officially" loses reserve status - this is going to be the most amazing disaster you can imagine.

Get out of debt. Put your investments in tangible assets, precious metals and land are good. Learn to be a little more self-sufficient.

What am I doing? About to build a $400k house. Go figure