Back in my post on July 9th I said it felt like the oil bubble was about to burst. Of course the day after I wrote it oil went up...To nearly $150. But a funny thing then happened, it slipped. No problem said the investors, "Its a temporary shelf price due to goblety-goob."
This ignored the gravity (pun intended) of the rest of the news. Demand is down, way down. In fact for the first time year over year gas usage in the US looks like it will contract. All it takes is a very small pinhole for a giant to blow-out or completely leak out.
I am not saying the $2 gas will be here by Christmas, but maybe $100/barrel oil...The oil producers got this. No one believed that the intrinsic value of the Texas Tea was anywhere near $150/barrel. The didn't think it was $20 either, the pendulum swings both ways...usually to far.
So unless Capt Crazy in Iran, or Major Mayhem in Venezuela pull off a Joker-level whackness act, I gotta believe the price support isn't there. If so it is going to be a big help to US families.
However, I AM the Madame Cleo of Oil predictions so I'll say $100/barrel before Christmas. It probably won't stay there, but it will touch it.
So let it be written...
ps - Like the "real" Madame Cleo I am a complete fake... :)
5 Comments:
Hi Racer - It would be nice to see the price of oil come down. My biggest concern is that the price drops won't be properly reflected in the price we pay at the pumps.
At least here is the states the actual gas sellers have been really hurt by this move...sounds impossible, butmany are going bancrupt during the boom. As you can sell gas for whatever you want bigger convenience store have been using gas as a way to sell other things like car washes, snacks etc..
The little guy cant compete right now.
So I think the price will come slowly down. My hope is for $100/barrel by Christmas.
Prices are already dropping here. I paid $3.86 at Costco yesterday, where it's been as high as $4.30. Still cost $55 for a fill-up!!!
Prices are coming down, but it is Funny (pun intended) that we would be soooo happy with $3.50 gas now!
I hope oil is down in time for winter. Hate to hear those fixed income couples suffering stories.
This is a great bllog
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