Oil = $88

Well, this is a welcome change: Crude Oil trades as low as $87.47 this morning, most likely on fears of a slowing US economy.

The key question now is how much and how fast this "cheap" oil will save consumers money, so they can go shopping and save the retailers’ holiday season . . .


chart courtesy of Barchart.com

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What's been said:

Discussions found on the web:
  1. Karl Smith commented on Dec 3

    I remain bearish on oil. I think we should really be in the $75 range. Though I think there will be limited impact on the consumer and this will mostly lead to a widening o crack spreads.

  2. Metroplexual commented on Dec 3

    Barry don’t bet the farm on the consumer saving the day. I think consumers are just at the point metaphorically, where it is the morning after a big drunken bash and the fed is offering them the hair from the dog that bit them. But they would rather go into a dark room and sleep it off.

  3. spencer commented on Dec 3

    It could also be a signal that demand is falling — because the economy is tanking?

  4. Stuart commented on Dec 3

    China is now a net importer of refined gasoline products.

    In the west, there are on average 2.5 cars/person.
    In China, there are 28 persons/car.

    Don’t even have to get to India.

    The direction of oil is clear and those perennial bear oil analysts of Wall Street should’ve been the 1st jobs offshored.

  5. Boom2Bust.com commented on Dec 3

    Oil bounce anyone?

    From Reuters this morning: “OPEC oil producers may decide not to raise supplies after a fall in crude prices from record highs, ministers from the cartel said on Monday.”

  6. rickyny commented on Dec 3

    Oil @ 75$ would still be high in historical standards and still weight on customers. I also consider that the trend is for the oil to go up even above 100$, easy, whereas it has it’s ups and downs is meaningless, the trend is what we should look at.

  7. Neal commented on Dec 3

    Given that the Fed has virtually promised a big rate cut this month, how much effort do you think will be put into driving the oil price down and supporting the dollar ahead of the cut?

    The last thing this administration needs is for the link between rate cuts and rising oil and falling dollars to penetrate the mind of the masses.

    Pushing oil as low as possible and pushing the dollar as high as possible are both strategies this administration would support at this time.

    And, don’t forget to massage employment statistics to justify the couple week old new meme (for the administration) of a slowing economy.

  8. michael schumacher commented on Dec 3

    CFC’S Mozilla says liquidity is hard to get…
    Not if you are him as he was selling again into the early October strength….

    Seriously who in the hell listens to this guy since he’s treated CFC as his personal ATM for the last two years.

    I can’t wait to see what wildly optimistic plan Hanky Poo and Co. unveil in about a half an hour. Whatever it is I’m sure the market (or at least goldman targeted stocks) will “love” it.


  9. michael schumacher commented on Dec 3

    BTW until wholesale gasoline trades with crude then none of the recent action matters….we’re all paying slightly off peak prices for gasoline still…
    “cheap” gas in SD avg. about $3.40 for low grade.


  10. dryfly commented on Dec 3

    Oil @ 75$ would still be high in historical standards and still weight on customers.

    Hell oil at $50 or $60 would still be historically high and should weigh on consumption… that is if the consumer were really spending his/her own hard earned money [and not rolling rolling rolling credit].

  11. arraya commented on Dec 3

    Opec said they were going to raise production in November and came up with an excuse why the should not. Even if the can raise production, would they is the question. The bigger question is if they can, will it offset declines from other oil exporters….

  12. montaigne commented on Dec 3

    3.40? wow. In MN we can still get it for around $3 for low grade. Maybe even below $3.

  13. Stuart commented on Dec 3

    Low $3s eh… wait until spring. I would expect to see alot of $4s throughout the country.

  14. michael schumacher commented on Dec 3

    Run, Run into the arms of Hope!!!!

    Yes run you overextended, irresponsible, debt laden VOTER….into the arms of the GOP.

    You can’t make this shit up it’s not even THAT good. But I guess some payment is better than putting those foreclosed values on the books, cough, banks, cough.

    “struggling home owners” but not a mention of the banks who will loose big if the foreclosure rates are allowed to continue to be posted to asset valuation.

    Should’nt this have been done by Commerce and not Treasurey??

    “hope now” it won’t work because there is no “america” in the name……


  15. GRG commented on Dec 3

    Cheap oil, a rate cut … none of these things are going to solve the problem with the consumer. People are being stretched to the point of breaking, not because they’re lazy or they’re greedy, but it’s because the gap between the middle and the top is out of control.

    See the strikes happening now? They’re only going to get worse. and worse. and worse. People are angry. Oil, rate cuts, even more jobs isn’t going to help. Those are not the fundamental problems that will come to haunt us in the future.

  16. Al Czervik commented on Dec 3

    I’m with “Neal” (above). What better time for the long-expected, coordinated CB intervention to prop the dollar than while Benny is preparing the next bailout bucket? Will be interesting to see what ECB does next rate-wise. Also kind of interesting that the aggies seem to be showing some resilience against the broader commodity takedown.

  17. michael schumacher commented on Dec 3

    It’s because the collective level of financial acumen is at an all-time low that people like Henry Paulsen can get on TV on tell us to enjoy that sugar flavored beverage we’ve been selling ya for over a year.

    I love this quote:

    “some homeowners will become renters”

    Gee with all the credit problems and tightening of standards that has to be the captain obvious moment of the year…

    “awaiting the details……….”

    Aren’t we all


  18. Florida commented on Dec 3

    The trade volume right in the area where oil tops then begins to pull back is interesting.

  19. muckdog commented on Dec 3

    (1) Peak driving season over.

    (2) And maybe consumers making wallet saving decisions like carpooling, taking mass transit, teleworking, etc., to deal with higher energy prices.

  20. stan commented on Dec 3

    The history of declining crude prices finds that pump prices of gasoline tend to lag. Big oil only grudgingly lowers prices. Any declines will come slowly. Good luck if anyone expects it to show up in their wallets with significant consequences very quickly.

  21. Eddie commented on Dec 3

    I think it’s time that michael schumacher (with 5 posts already in this thread alone) should get his own blog.

  22. michael schumacher commented on Dec 3

    that will happen when you get a clue……
    so it has about a zero chance of happening just for YOUR information.


  23. GreenMachine commented on Dec 3

    Alaska received 5 natty gas pipeline applications including an unexpected bid from the Chinese. Meanwhile, MidAmerican Energy aka Warren Buffett drops out of the bidding citing Alaska’s climate of corruption. The slow, inept, awkward and corrupt process of waning ourselves off foreign oil is progressing along about like we should expect.


    It will take time, but the cornucopia of transportation and alt. energy solutions (wind, solar, ocean energy, nuclear, hydrogen fuel cells, pure electric with Lithium batteries, bicycling, walking and mass transit) will eventually replace our oil addiction. Long CCJ, SQM, APD, BPT and for the truly speculative paradigm shift, BFRE.OB!

    Everyone seems to ignore the fact we have a finite supply of oil. One attack on a Saudi oil terminal and hello $150. China and India want cars too, so demand isn’t going anywhere but up regardless of how bad congestion gets. Producing ethanol from organic waste in our landfills is sounding better and better…..

  24. D. commented on Dec 3


    Your stats haven’t changed much from ’99 and oil went to 10$!

    15-18$ oil has probably been burnt but currently cash flow break even is around 45$.

    Even if long term oil prices are up, I’m betting that we’re going to get a lot of peaks and troughs until those wells dry out.

  25. D. commented on Dec 3

    I agree with dryfly. Oil is hurting the consumer, only the typical consumer doesn’t have aclue. She/he does not realize that he/she is sacrificing his/her retirement which each fill-up.

    The typical consumer has no concept of time value of money.

  26. wunsacon commented on Dec 3

    >> The last thing this administration needs is for the link between rate cuts and rising oil and falling dollars to penetrate the mind of the masses.

    Agree with Neal. I suspect few politicians want citizens to clearly see the connection, because that takes away the invalid excuses (OPEC for “constraining” supply, China for consuming supply).

    Last year, to combat high oil prices, Congress actually tried to extend antitrust legislation to OPEC.

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