Friday, November 28, 2014

Prepare for Lower Gasoline Prices: The Crude Oil Plunge Following OPEC's Decision Not to Cut Prices

OPEC is running a major squeeze play. At it's just finished meeting in Vienna,, it decided to not lower the production ceiling. This is will put tremendous pressure on the oil price. It will cause many US domestic high-cost oil shale producers to shutdown production.

Here's what happened in oil trading today:


  1. Will $60 Oil Be The Black Swan?

    If it is, I don’t know of anyone who saw that coming. I have been asserting over the past month or so that the plunge in the price of oil is the best indicator that the global economy - including and especially the U.S. economy – is collapsing.

    There had been a bubble of sorts blown up in the shale oil industry. Billions in junk bonds have been issued against what is turning out to be the latest of Wall Street’s financial engineering Ponzi schemes. But what everyone seems to be overlooking is that the banks and private equity firms themselves are going choke on the billions in bank debt issued by the collapsing shale oil industry.

    This is a must-read commentary posted The Automatic Earth Blog: The True State Of The Economy.

    It is highly probable, in my opinion, that the crash in the price of oil not only is a signal that the U.S. economy is in trouble, it could well be the unforeseen “Black Swan” that pulls the rug out from under Wall Street and the financial markets.

    1. its not going to hit the US economy much as oil and gas is only a small part of the economy but amusingly that sector makes up about 15% of the junk bond market so the bloodletting among the bondholders is going to be knee deep