Already in free fall, the price of oil could soon push much lower as the effects of a global recession take hold.
Crude fell $3.12, or 6.7%, to settle at $43.67 a barrel on the New York Mercantile Exchange on Thursday. Many oil-industry insiders and traders now say prices could slump much lower, into the $30s, before supply cuts push prices back up, perhaps much later into next year. The changes come from a combustible mix of factors — a rise in inventories, shifts in the quality of oil used by refiners, and severely deteriorating demand.
If nothing else could convince me that the run up in oil prices wasn’t an Enron-like spike in speculation, the $100 per barrel fall in two months sure starts my speculations moving in that direction.
Though I have to admit…This family has seen our gas usage half in less than a month. Losing a job and not having a 60+ mile a day commute will do that. And I guess the figures today of a half a million jobs lost last month would relate to some lessening of demand, the “demand” was still there when the price started dropping like a rock..Just speculating here.
On another “speculative” note…How long will it take congress to realize there is a forgotten unemployment tax that is going to be hitting many of this new group of unemployed? The 10% penalty tax on retirement savings will be hitting a lot of these workers as they are forced to tap into their 401K’s to try and make the mortgages and put food on their families tables. Not to even mention the fact that this portends to be a very cold winter, and if that happens, heating costs are going to be high (just not as high as a few months back).
Another sign of the times, at least here in my neck of the woods, both my electric bill and my insurance bill will probably spike next year as the utilities (unregulated, of course) and the insurance industry try to recoup their losses from the past few years of tropical activity along the Texas-Louisiana coast. Already the stories of homeowners having to hire attorneys to try and get their insurance claims paid in a manner that reflects the realities of their damages are showing up almost daily in the papers.
Add in the reality of lost jobs in a shrinking job market in the “Energy Capitol” of the world and the outlook is grim.
It seems like we may be seeing the only reality of the trickle down theory of economics. In bad times the bad news trickles down until everyone feels it…Sadly, this is not what we have been led to believe would happen for all the years the Republicans have pushed the theory. And all of the money Congress is throwing at this crisis will probably only prolong the pain.
One thing I am thankful for…I still have my back to the land library intact from the 1970’s when I never got around to using it. I added to it a few years back when I requested for Christmas, and Santa managed to stuff it into my stocking, three decades of The Mother Earth News on CD…I have a feeling that all of that info and the TroyBilt tiller will be getting a lot of use starting this winter…