....so get used to it people. We are in a major global slump. Wait for earnings to confirm that fact. Demand for oil will stay low for some time. Bernanke won't be bailing us out with QE3 heading into an election season. Europe is in a major recession. China could have a hard landing.
Article: Oil dropped to an eight-month low after the Energy Department reported that U.S. crude inventories climbed to the highest level in 22 years. Brent crude in London tumbled to an 18-month low.
Futures in New York declined 2.7 percent after the department said supplies rose 2.86 million barrels to 387.3 million last week, the highest level since July 1990. The decline accelerated after Federal Reserve policy makers lowered their outlook for growth and employment.
“We are down because inventories were plentiful even before today’s report,” said Todd Horwitz, chief strategist at Adam Mesh Trading Group in Chicago. “We will probably take out $80 in the next couple weeks.”
Crude oil for July delivery fell $2.23 to $81.80 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 5. Prices are down 17 percent this year. The July contract expired today. The more actively traded August contract dropped $2.90, or 3.4 percent, to $81.45.
Coming off the warmest winter in the last 100 years, energy in general is down. Wait until Christmas of this year and I think you will see oil and nat gas rebounding nicely. Wouldn't surprise me to see oil well above $90 and Nat Gas above $4 by year end. Supply and demand have very little to do with it, its all about the traders on Wall Street. Or as Gartman puts it, "the price of oil is determined by the marginal trades". Speculators drive the spot market.
You may be short sighted on this one. Here to stay may only mean 3 - 5 years. True energy demand is down for now,,,,, so that makes it time to load up. If our economy does one day get back on track all the money created by the FED is going to kick in and cause inflation for sure. This is the time to think 5 - 10 year out and buy the energy bargains now and have a modest dividend pay us 4 -5 percent while we wait.
Energy futures my be tomorrow but they are very short term. We could see oil at 50 before inflation kicks in. Buy now and be patient so we don't need to chase it when the move starts. Buy and hold good stuff is as important as it ever was.
Billions of new consumers in the developing world are going to eat up oil and gas like never before. Be patient.