but unless you were in the oil business(I was) 1983 was not a very good time economically. 1983 was the beginning of the end for the oil boom that started in the 70's. Oil peaked then flattened out in '84 then the bottom dropped out in '85 when the Saudi's flooded the market with oil.
why does this strike me as not a good sign ?
unfreakingbelievable.... the first contraction in demand since 1983 ? Didn't things massively suck then ?
"Oil prices on Tuesday tumbled below $60 a barrel, their lowest level in 20 months, amid worries that the global economy is slowing more rapidly than expected.
The drop led a broad retreat in commodity markets, with the Reuters-Jefferies CRB commodity index down 3.5 per cent to near a five-year low.
The slump in oil and commodities prices came as the rally triggered this week by China’s record spending stimulus mutated into fresh concerns about its economic health.
In New York, West Texas Intermediate oil prices tumbled to an intraday low of $58.32 a barrel, down almost $4, while in London, Brent oil prices fell below the key $55 a barrel level for the first time since January 2007. Several members of the Organisation of Petroleum Exporting Countries said they were supporting further production cuts and could meet ahead of their next gathering on December 17.
Iran’s oil minister warned the market was still oversupplied in spite of Opec’s agreement last month to cut its production quota by 1.5m barrels a day.
“The [previous] decision by Opec was able to prevent a large decline in prices but as for the stability of prices, this needs a more far reaching decision and further measures,” said Gholamhossein Nozari.
Traders expect a large cut in the International Energy Agency’s forecast for demand for this year and 2009, to be published tomorrow. Some said the IEA could signal a contraction in oil demand, the first since 1983.
for what that means is that the US will not develop its own independant petroleum resources, but rather continue to depend upon third world supplies.... now why is that bad?
The other negative part, is that with cheap oil, we will not develop alternative energy sources... and that too, is really, really really, really a very bad thing...
yea, expect this, Al - fricking Gore - and I are on the same page. Get off oil, it is a sickness that can only lead to ruin and destruction.
You can bet your last dollar that we will see $200 oil in the not too distant future.
Bizzie is 100% correct, all interest in alternative energy and the money to develop it will dry up like West Texas in August.
When he proposes investment in alternative energy - it will be good to have both sides pulling together on this. We have a reprieve, we can develop resources without going broke on oil in the meantime.
Welcome aboard!
as long as they aren't boondoggles like ethanol.
Let's see how much traction they get if oil stays cheap.
Real renewable energy projects are needed, not more support for ADM. This will be one of the true tests of Obama's presidency, if he can lead us to a new enegy policy in the face of temporary oil price reductions I think he will have earned everyone's support.
If he can do that it will be a huge accomplishment. considering the fact that he is aligned with Miss "Natural Gas is not a fossil fuel" forgive me if I'm skeptical.
cellulose into EtOH.... instead they went after the readily available starch and sugar in the corn kernal... putzes... breaking down cellulose should have been the priority... would have taken longer but would have yielded a more efficient way to go - and would still have left the corn kernal for food! same with sugar cane... and other grass crops.
but hey, that would involve rocket science which as we know, current POTUS is not.
Ethanol is not one of them. Our ethanol industry was fucked up way before he ever took office.
1983 was pretty fucking good if I remember correctly it was RONALD REAGAN'S first term.
terrible unemployment back then.... things werre falling apart right and left... only this time we're at the other end of a long term economic cycle...
but unless you were in the oil business(I was) 1983 was not a very good time economically. 1983 was the beginning of the end for the oil boom that started in the 70's. Oil peaked then flattened out in '84 then the bottom dropped out in '85 when the Saudi's flooded the market with oil.
First, credit is frozen, which dries up funds for speculators bidding up oil futures.
Second, demand has slackened due to the recession. It might the a sign of general deflation to come. The prices are a relief-- if you don't get laid off, because it indicates an extreme contraction of the economy and more expensive or unavailable credit.
-- Modified on 11/12/2008 3:42:29 AM
spoken like a true academic who has never actually traded anything more than a baseball card. The commodities markets are as liquid and as solvent as they ever were, also not everybody bids "up" the shorts have been making everybit as much money on the way down, as the bulls made on the way up.
Just because you win one bet, don't think that all of a sudden you have the system figured out. lol
AS far as your second point, I don't really see much to disagree with, except for the fact that a global recession may or may not effect the price of credit. On the contrary recessions tend to keep interest rates low because of the lack of inflationary pressures that growth creates. Unless of course we are about to repeat the Carter years.
just because one talks here about stuff he knows nothing about.
Careful now, you are going to turn into BizarroSuperdoofus
It doesn't do much to the price of credit per se, but price deflation makes repayment of loans more expensive in real terms. Think about it, if you have negative inflation: the dollars you borrow today are worth more later. So when you pay them back, you are losing. For practical purposes, the rate of deflation might be added to the interest rate you are paying, making credit, in practice, higher than its sticker price. It's especially bad if you don't expect it, and people are used to borrowing in a somewhat inflationary economy. Like I'd hate to be making credit card purchases when prices deflate.
I made a muddle of what I was trying to say in the first point. I didn't mean "futures," I meant prices. I should have thought more about it.
It's better just to say that if producers ramped up their capacity, but the economy slumps terribly in the meantime, the price of oil is going to deflate. If the rate that oil has deflated is any indication, the world economy is in real trouble. It might be the leading indicator in general deflation. We'll see.
But meanwhile, oil prices can't be bid up with leveraged buying. This has to have an effect.
-- Modified on 11/12/2008 4:11:45 PM
Lets hope O doesnt turn out to be such a pussy. It doesnt seem like style to be honest, and he tends to listen to his counsel.
This the result of market manipulation by capitalist speculators.