With another US bank having succumbed to the financial turmoil (my own Wachovia) and other banks in Europe taking emergency measures, the oil and gas markets decided that demand was falling faster than inventories. The price fell more than 10% back into the double digits and Deutsche Bank lowered its oil price forecast 23% for 2009, to $92.50 per barrel. Economic recession in Europe and Japan along with a likely recession in the US brings with it the potential for global oil demand to be close to flat next year. Even with slow production growth, such stagnation in demand could allow oil inventories to rebuild to (more…)
Posts Tagged ‘Hurricane Ike recovery’
Financial Collapse Sends Oil Prices Spiralling
Monday, September 29th, 2008Bailout triggers oil rise, along with Ike recovery & Mexico declines
Monday, September 22nd, 2008The bailout completes a trillion-dollar gift from tax payers to maintain some semblance of the US financial sector of the past few decades. The era of investment banks has ended, beginning what may turn out to be an era of inflation and weak dollars. This dollar weakness catapulted the oil price to as high as $130 per barrel, causing the NYMEX trading floor to suspend trading briefly since prices’ record rise was more than the one-day limit.
Other bullish news came from the Gulf, as less than 25% of its oil production has returned post-Ike. We are almost 10 days away from (more…)