Friday, December 19, 2008

Double Good News

So OPEC is making a deep cut in production, but oil prices keep dropping. Let's hope the trend of us paying less and OPEC getting less continues for a long time.

Meanwhile, Huge Chavez figures a fair price for oil would be between $70 and $90, twice today's cost. Chavez better watch it, since the last thing he wants is the world to be fair.

2 Comments:

Blogger New England Guy said...

Part of why its going down is the reduction in usage that resulted from the shock of $4 gallon gas last year. That coupled with a global economic crisis (maybe someday economists can tell us if the price shock helped precipitate the crisis- hard to say- fuel prices were going down by the time of the crash in September but the earlier high prices had helped kill the SUV market for a time and we see where the automakers are today. Other fuel shocks (1973, 1979-80) produced bad economic conditions but not as bad as this one (so they say at least). Of course there are many contributing factors to current problem.

6:37 AM, December 19, 2008  
Anonymous Anonymous said...

The rise in oil prices was unwarranted by the fundamental conditions of the economy and supply and demand issues. Now the drop (below $40 a barrl)is likewise unwarranted. Commodities markets, moreso than securities markets, seem to be very susceptible to "peer pressure" and rumors and panic.

10:06 AM, December 19, 2008  

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