Finally, the price of oil is back to more sane level after the financial crisis. Will it be back to $20??? Who knows.
Thursday, October 16, 2008
Oil falls below $69
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2 comments:
Oil has plunged as the credit crisis hit economic growth and fuel demand in the United States and other industrial countries.
The falling currencies are a sign that investors are losing confidence in those countries, and it makes their imports more expensive.
The deceleration of the world economy has also brought the summertime spike in commodity prices to a sudden end, an illustration of how entwined the global economy is. A credit squeeze can lead to a drop in U.S. spending, which can curb demand for Chinese exports, which can curtail demand for commodities. Alexander Shlepakov
The rise in commodity prices is mainly due to the voracious hunger of US as the epicenter of the world economy, generating huge demand through immense credit. Now is the time for the correction to slowly strike a balance between supply and 'real' demand.
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