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A new low price for oil futures @ $43

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A sample of crude oil from Haenigsen, Germany.
Image via Wikipedia

Here’s an excerpt from a CNBC article based on a Merrill Lynch report:

Merrill Lynch Says Oil Could Fall to $25
MERRILL LYNCH, BANKS, INVESTMENT STRATEGY, OIL AND GAS, ENERGY, COMMODITIES
Reuters
| 05 Dec 2008 | 06:06 AM ET

Oil prices are likely to keep falling until well into next year and could reach $25 a barrel before recovering, U.S. bank Merrill Lynch has said.

In a research report published on Thursday, it said oil prices should begin to rally in the second half of 2009.

Merrill Lynch recently cut its forecast for the average price of U.S. crude oil futures and North Sea Brent crude oil to $50 a barrel from a previous estimate for both crudes of $90.

“With demand vanishing across all key oil consuming regions, benchmark crude oil prices continue to plummet,” it said.

“In the short-run, market participants will focus on both OPEC and perhaps even non-OPEC producer responses to balance the market.”

“A temporary drop below $25 is possible if the global recession extends to China and significant non-OPEC production cuts are required,” it said.

If you like the sound of $25 oil you are a narrow minded US consumer. That possibility throws the woolies into this Canadian who has a stepdaughter going to Berklee College of Music. The current USD to CND is 1.29 and literally 95% of that differential is oil price related. Disaster!

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Written by BobG in Dalian & Vancouver

2008/12/05 at 05:51

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