formula79

Lowest Price since February 04. I remember around that time OPEC saying that needed oil to be at around $30 a barrel to keep new investment going. Now they claim it needs to be at $80 to justify continued investment? What costs twice as much as in 2004 now? It is hard to keep your crappy regime in place when you don't have oil money to hand out.

Either way looks like their greed is finally coming back on them. They sat back and laughed while collecting record money..and now that people have started using less oil, and it has sank several economies they want to cry uncle. If they had some forsigt, they would have relaized that unrealisticlly high prices would cripple future demand.

Then again..the current market also shows my idea a few months back that oil was ran up by investers using borrowed money was to some extent acurrate. If you look...there is a pretty nice correlation between the credit markets freezing, and the price of oil going down. I am willing to bet also that if you look at oil commodities...they are changing hands a lot less between purchase and delivery.

At least there is something to smile about.

Z28x

Amazing, I don't think anyone would have ever thought we would see it this low again. Just goes to show how bad the economic crisis is.

This is also a fantastic opportunity to buy oil and gas ETFs and Stocks while they are cheap. You just know exporting nations are going to cut production to get the price back up in the $60-$80 range.

Z284ever

Lower gas prices have saved consumers 200-300 billion dollars, compared to the highs last summer.

guionM

There was an article I read (I wish I'd copied the site address for my files) that listed how much each OPEC country needed to sell it's oil at in order for them to sustain themselves.

The target price for Saudi Arabia was the lowest, while Iran & Venzuela were quite a bit higher. The Saudis have used this plus their massive reserves to keep the more radical members of OPEC under control.

Dropping our oil consumption (although Saudi Arabia is the only place in the middle east we get oil, and even then they are behind Canada, Mexico,& Nigeria) really hurts those countries that both are oil producers and have antiAmerican views.

Saudi has more oil than any other OPEC member and unlike other members, isn't dependant only on oil for their livelyhood.

These low oil prices are playing havoc with oil prodicing contries that don't like us.

formula79

Again...I think the only reason gas went up was because there were two many investors using borrowed money trying to buy it. There was never a demand issue for actual oil..there was a damand issue of too many investors trying to buy a static amount of oil futures.

Dan Daly

Well lets see here, oil ran up and up for years before really taking off this year. They invested in a number of projects, not just for oil, but for their entire country. Oil revenue is their economy. When they start building parks, roads, bridges, etc, it comes from oil revenue. Have you been to the Middle East ever in your life? I doubt it. The last time I was in Dubai a few months ago, there were a ton of half built skyscrapers in the city. They were expanding and building all of this stuff in order to lure in new types of businesses so oil wouldn't be their only offering to the world. Now with them half built, they leave all of these lights in the building so at night the city looks like a really nice city and not a frozen construction zone, which is what it is now.

They did, which is why they had planned for roughly $80 oil and not $150 oil. And as stated above, many of them were using this time to try and diversify their economies.

Poor middle eastern countries with single source economies are breeding grounds for Islamic fundamentalists. Do you have any idea how many enemy fighters I've run across over here who only got into the whole thing for money and hope? Maybe only 20% are your hardcorps raised Jihadist. The other 80% are split half and half between guys who couldn't go anywhere else to get education, training, a job, etc and needed a place to turn to for hope . . . and the other guys just need to make money in order to feed their families.

I'm not saying I like high oil prices anymore than the next guy, but having been in these countries and seeing what their lives are like day in and day out; rubbing their faces in the TRUE poverty that is happening to them isn't something I find we should be gloating about.

Z284ever

Russia's economy is literally imploding. Iran is hurting. And that nutbar, Hugo Chavez can't be too smug.

guionM

Although I strongly disagreed with you months ago on this, I now believe you were at least partially right.

With fuel prices getting towards $1 per gallon, This is probably the best time to talk about the 3rd rail of politics outside of social security... a fuel tax increase to start paying for all this debt we've run up the past decade (and has handed China defacto control of the US.

ZZtop

Exactly. Oil is not going to stay this low, so don't get too excited guys. When the economies recover, so will demand. Not to mention the proposed infrastructure builds to bring us out of this recession will increase demand.

You need to stay focused further ahead. Alternative energy in any significant role is decades off and thats just for the most developed nations. When economies recover and China, India, Russia, and Brazil continue growing, so will demand. What is more interesting is that the sudden fall in oil and gas prices has caused oil companies to put expansions and new projects on hold or cancel them completely (I work in the industry). Thus, when the demand resumes, the supply will not be there. In the coming years we are going to see some high oil prices again and the projects put on hold/canceled by this recession will be the reason.

I like USO, DXO, DIG and PBR for an individual company play.

Ed 2001 SS

This bit of good news warms my heart.

mcsslover1987

We in Siskiyou County CA have the higest prices in the country @ 1.999 (reg) for the big named stations. I'm sure in SF and Hawaii there might be higer prices. One station here in Yreka is 2.20. I saw on tv the other day where one staion somewhere was 1.4999and said to myself I want to go there What gets me is heating oil and kerosine is still way over 3 bucks and its rediculous. Some sheister out there is still making moocho bucks!!

formula79

Massive long term public works projects when your only source of revenue is a highly volitle commodity is setting yourself up to fail. Fact is..the Middle East has some of the most extremist rulers in the world, and they use oil money to pacify people and stay in power. Same thing for Hugo in Venezuela. Rather than investing in diversifying and building other industries..they keep the people happy to stay in power. To make true democratic change and get out from under dictators...the citizens of these countries need to realize how mismanaged and corrupt their governement is.

Still...3 years ago $80 a barrel oil was a doomsday price no one would have imagined..so in my mind it is still not a smart business plan to expect it forever.. Countries like Iran and Venezuela from what I have seen in the news don't even have the capacity to refine the oil they make. We refine all most all Venezuela's oil matter of fact. That being said..I really don't care if low oild makes it so they can't afford massive social projects. As I said before..all the money does is passify the people so the real change that needs to happen in these countries never does.


I don't see how transfering huge sums of money to countries that don't like us is a good thing. What your suggesting simply makes no sense because these countries in several cases are run by extremists. And while they don't in many cases even like each other...it seems the only thing that unifies them is they all don't like us. These are not reasonable people you rationalize with....they are crazy. They dont think like you and me. Giving them more money is not going to make them like us..it simply makes them insane people who now have actual money to do insane things with.

I think most people would rather they stay poor....because it reduces the true damage these people can do. More money can be the difference between a nuciance, and a catasrophe.

formula79

There was never a demand issue to start. No one was waiting for oil or selling barrels on ebay. With proper market regulation keeeping the speculators out of the oil markets..it may very well be a while before we see $100 oil again.

Everyone wants to be doom and gloom about the future..but the fact of the matter is oil went up to $150 a barrel with no real shortage. That is simply unthinkable and makes no sense..untill you really start understand how the financial markets work and look at the increase in the volume of oil being traded as the price went up.

Z28x

Think they will be finished? Or Was Dubai construction speculation on steroids?

ZZtop

There was no real increase in demand that drove oil from about $80 to $147. That I agree. However, the largest consumption ever was in 2007 and parts of 2008. There absolutely was an increase in demand over the last several years, much of which is attributed to China and other emerging nations.

I am not saying oil is going back to $100+ overnight. However, I do think we will see prices in the $60 to $80 range by late summer (in fact I'm betting on it). This time I think the prices will stay there for a while and continue to creep up from there. For good.