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Oil dips further,

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   limo
Friday, December 19, 2008 10:00 AM 
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A day after OPEC decided to cut the oil production bt 2.2 million barrels per day, oil prices surprising dip further to below 38 dollar per barrel - strange phenomenon.Does it mean that there is no demand of oil in the world right now.
Abrar replied on Friday, December 19, 2008 03:27 PM 

R E C E S S I O N
arsu replied on Friday, December 19, 2008 04:50 PM 

OPEC took this emergency measure to boost up the consistently falling oil prices (as major portion of their revenues come from oil only). But since the cut they decided will be effective from 1st January’2009, hence before that any considerable rise in the oil prices is not expected. Yes deepening global recession is one of the major causes that led to the drastic reduction in the demand (america is the biggest energy consumer) thereby bringing the oil price down. But believing that this drop is due to reduction in demand solely is not true also. Speculators - play a key role in driving the oil prices, as they move in and out very quickly and leave a lasting effect on the market. Now there is deep concern on the way oil is traded, and experts are emphasizing to introduce certain mechanism designed to prevent speculators from plunging into markets and withdrawing billions of dollars overnight.
Jameel replied on Friday, December 19, 2008 06:42 PM 

Price surge will take time and may come again to about 60,70 level
Most of Opec countries are not complying with cut and are producing more than they are showing.
Gamblers are very strong they were responsible for 147 $ price not demand.
Soon you will see the "Hasher" of US dollar as well which I predicted one month back, early indications are already coming.
Abrar replied on Friday, December 19, 2008 08:36 PM 

"Hasher, Nasher", that's right. However, this will make US imports more expensive and will hurt those countries whose economies depended on exports to USA. Effects of a weak USA consumer have already started to appear in China. Many of its production facilities have started laying off workers. It is a jigsaw puzzle. One can find Chinese products almost everywhere in the world and more in the poor countries. Exports of those poor countries also reach US markets. If their exports decline, so will their imports.

I aint sayin US dollar should stay strong. I feel that the word economy is in a downward spiral and at some point, it will bounce back. Exactly when this will happen, is a million dollar question.
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