Is Today the Day?
A few posts ago I suggested that the Bruce Springsteen song “Glory Days” was quite apropos to Russia. Today, another Springsteen song seems appropriate: “I’m Goin’ Down.” What’s goin’ down, again, is the price of oil.
As I write, Brent on ICE is down $3.30–or 7.8 percent. Cash settled WTI on ICE is down $3.33, or 7.6 percent.
A couple of weeks back, Michel asked when the price of Urals Med would fall below $40/bbl. Since it was selling at $41.75 yesterday, I imagine that today is the day.
So . . . any guesses as to when we hit $30?
One can’t help but marvel at the amazing irony here.
The USSR was feared for its nuclear weapons, and it was destroyed by them in an arms race
it could not afford.
Now, Russia had become feared for its weaponized energy resources — and once again it is
being destroyed by them.
No less than the USSR put all its power eggs in one basket, so did Russia. The USSR
stumbled and fell and broke them, and Russia has done just the same.
Comment by La Russophobe — December 4, 2008 @ 3:41 pm
This from the Financial Times:
Merrill Lynch warned that oil prices could fall as low as $25 a barrel next year if the recession affecting the US, Europe and Japan extended to China, the main driver of demand growth in commodity markets in recent years.
Merrill’s warning came as oil prices sank below the $44 a barrel on Thursday, the lowest level in almost four years, in spite of dramatic interest rates cuts in the UK, Europe and Sweden.
Souce: http://www.ft.com/cms/s/3beefae2-c1f7-11dd-a350-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F3beefae2-c1f7-11dd-a350-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fmarkets%2Fcommodities
Comment by Michel — December 4, 2008 @ 4:22 pm
The shelf life of the Putin, Chavez and Iranian mad mullah regimes are shortening with each tick oil goes down.
Here’s hoping for cheap oil for a period long enough to wreck havoc on those regimes.
Comment by penny — December 4, 2008 @ 7:50 pm
Let’s be clear: There is one and only one reason that oil prices have plummeted. That is that U.S. demand has dried up.
Let’s be even more clear: Attacking and undermining the U.S. has been the centerpiece of the Putin foreign policy for the past decade.
Farmer Putin has quite literally tried to kill the golden goose that supported Russia’s economy. It’s doubtful his puny and pathetic efforts had much real effect, but that’s not the point. The point is that, indirectly, his goal was to wipe out his own country’s economy. This is what you get when you have a man with no training of any kind in business or economics, schooled only in blunt trauma, running an nation’s economy with no oversight or accountability and highly constrained flows of information.
You get disaster.
Comment by La Russophobe — December 4, 2008 @ 8:11 pm
I would hope the current and upcoming administration understands that this could be the only opportunity they will have to undermine Putin and the Kremlin and would do whatever poissible to keep demand for Oil , in the U.S.A , as low as possible.
Obama seems to be iffy on oil/offshore drilling , but with what’s happening in Russia , i would hope someone can convince him to change his mind.
Even a gaz tax of about $1.50 , should help fend off oil prices from rebounding too soon.
Announcing the drilling in ANWR would probably help too.
Obama is from new renewable energy/oil dependency , but this may take a while…Probably more then a decade.
The GM executives drove to washington with an electric car , so i hope they could fastrack those cars into the general population and extract the west from oil.
Comment by U.S.A — December 4, 2008 @ 10:48 pm
This is what Gazeta.ru had to say about the $5 billion:
Золотовалютные резервы РоÑÑии выроÑли впервые Ñ ÑентÑбрÑ. Ðо, увы, Ñтот отрадный факт, который не преминул отметить Владимир Путин, не означает уÑпех финанÑовой политики влаÑтей. Ðизкие нефтÑные цены продолжат давить на рубль и вызовут дефицит бюджета, а роÑÑийÑким корпорациÑм по-прежнему нужна валюта Ð´Ð»Ñ Ð¿Ð¾Ð³Ð°ÑˆÐµÐ½Ð¸Ñ Ñвоих долгов. Ð’Ñе Ñти проблемы будут решатьÑÑ Ð·Ð° Ñчет ÑредÑтв Центробанка.
Source: http://gazeta.ru/financial/2008/12/04/2903756.shtml
Comment by Michel — December 4, 2008 @ 11:03 pm
Oops! Didn’t mean to post this here (it was meant for another thread).
Comment by Michel — December 4, 2008 @ 11:07 pm