WTI Crude Drops Below $101 - Lowest in 2 Months

Tyler Durden's picture

Worried about tensions in Kuwait, Jordan, and Iraq... the 'market' is not. With the spec positioning significantly net long, it appears 'they' have found another pain trade... as WTI Crude loses $101 and drops to 2-month lows...


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NoDebt's picture

If we go into outright recession by printing negative again in the 2nd quarter we might be able to get the price below $100/bbl.  Maybe.

CrashisOptimistic's picture

Pretty much that.  Smash demand, price falls.

Of course, smashed demand kills people.

cougar_w's picture

Gail Tverberg over at "Our Finite World" blog (http://ourfiniteworld.com/) has been hammering on this for years now. I read one of her posts a few months back -- about how the price of crude needs to stay over $100 or maybe higher, or we're toast-- and suffered a total religious conversion on the topic of the price of oil and the economic viability of extraction.

I fear she is 100% correct on a number of issues that even taken individually are scary as hell. If she's right about the way all this is now connected then we're in such bad shape it boggles the mind.

The woman is brilliant and her synthesis of the issues is simple and compelling. If you are not aware of her work I absolutely recommend you give her a good and thoughtful read.

Pheonyte's picture

A number of people have been hammering on the same theme: Chris Martenson, Richard Heinberg, John Michael Greer, etc. The fracking "boom" is just another bubble, and the deflating process has already begun.

BobTheSlob's picture

Me thinks we haven't quite seen da bottom o du dip yet.

TheRideNeverEnds's picture

I agree, and a good indicator is the fact that I have short puts CLU4 at 98.  That practically guarntees we will trade back down to the mid 90s in the next 35 days....

fonzannoon's picture

Operation: fuck joe six pack in the ass on his momorial day to 4th of july road trips

is officially over. will re commence again towards labor day

Dr. Engali's picture

Time to stop talking about gays and get Iraq and the Ukraine to hit the news cycle again.

disabledvet's picture

That's just it.  "More war less growth.". Even if its just " talk" (and it is not.  Those are real people getting killed in Gaza, Israel and Ukraine.)

No one even bothers to question "the internet of things."

What if we are that "thing" and "that's the war"?

Are we winning?

The financial costs are pretty obvious.

CrashisOptimistic's picture

Oil was well north of $100 before Ukraine or Iraq ever hit the headlines.

Economic weakness is rampant now, especially in China.  That's where the demand growth (or decline) is most powerful.  A few months of $105ish oil and smasheroo.

SheepDog-One's picture

Now their only option is to print FRN's hand over fist until complete implosion.

SDRII's picture

after the relentless selling in the ag complex.


Inflation fixed

Yen Cross's picture

  Rigged much?  The Fed. is hedging CL contracts on the back end.(Chinese style) What a fucking joke these markets are.

  Ohhh...wait.  Could be lack of demand? Q-2 gdp in the shitter and Q-3 even worse. The usd is in the tank and CL still can't rise?

The Axe's picture

Its only the economy when its moving up....retailer can absorb $5.. gas     lol  

The Axe's picture

another   no volume  melt up    nuts

fonzannoon's picture

yesterday bloomberg news was celebrating lumber liquidators and the container store's awful sales as good news that "the consumer has finally bought so much stuff they don't need any more right now".

Save_America1st's picture

we sure aren't seeing any helpful drops in gas prices though.  Funny how when gas got between 2 and 3 bucks for a little while during GW all we heard non-stop from the "media" and the Left was screaming and crying. 

Gas was 2 bucks when he handed the keys over to a gay, Marxist, treasonous, sociopath, and ever since then gas has been over 3 and sometimes over 4 dollars a gallon year after year nation-wide.

And have we ever heard anything from the "media" or the scumbags from the Left all this time?  Nothing but crickets...not a fucking word.  Hell, you'd think that some douche bag on the Right would take advantage of that and go on the war-path against obama, the Fed, the enviro-Nazis, etc.

But nope.  They're all in on it together as usual or don't have the balls or understanding to launch an attack that might force him to do something. 

disabledvet's picture

By this time next year you won't even need gasoline dude.

"Coal for the furnace" and that will be it.

Government needs you to pay taxes's picture

An excellent observation, and the hallmark of a totalitarian regime where information is repressed, just like interest rates.  It will take some Declarations of Independence, plus an ocean of blood, to set this right.

fonzannoon's picture

Gas was $2 because crude went to $147 and sent the spy to 666.

SheepDog-One's picture

Right, but prior to that the bubble economy was supported by oil at $20.

NotApplicable's picture

Now it takes oil at $100 to support the derivatives that drove it there. Gee, I wonder who benefits from that?

CrashisOptimistic's picture

That was 15 years ago.  Back when there was oil to be found underground.

The past 5 yrs has been the lowest discovery rate in 50, and with the price 90+ during that time, there was no lack of funding to search.

cougar_w's picture

And the Monterrey shale formation was recently (and to much collective wonder) downgraded to junk status.

It's over, baby. Just totally over. Within five years from now the conspiracy crowd is going to have a collective heart attack.

Kaiser Sousa's picture

Dow just went green...

mission accomplished - again.

Hohum's picture

The most expensive marginal barrel of oil is $100+(looking at the Bakken table).  The drillers are seriously negative cash flow.  But demand isn't there for a big price rise.  Ah, finance is a wonderful thing!

cougar_w's picture

Means game-over is what it means. Drillers are going to vanish into the night in one huge spasm of bankruptcies and the MSM won't even report on it. They'll just be gone, and that will have become the end of all that.

It's coming down to propaganda now; can TPTB tell convincing enough lies for long enough to keep civil society from coming unglued?

jubber's picture

So yesterday it was reported that the UN were  evacuating  their staff from Libya due to the trouble out there, but the whole drop in the Oil price was supposedly that Libvan Oil was coming back online...has it then?  why have the UN evacuated then? what am I missing here....guess we will have to wait for ISIS to blow up that Uranium they got from Mosul  University over the Saudi Oilfields for a small reaction !

orangegeek's picture

WTI oil broke first support today




Should see oil head into the low 90s very soon.  A rising USD will help acclerate this.

litemine's picture

Yes and Canada, an Oil Selling Nation needs a Pipeline to sell our Oil Overseas where they want to use it instead of reselling it for their profit or control.  Too long have we as exporters allowed our resources to travel south at their terms. Lets make our own. This is not a Jab against the Average American , many I have enjoyed meeting but it seems those in power.....want that Power at any cost so if we can sell our oil to say Europe, a second (front) buyer will give stability to our exports. I also say Fuck The Fed and the academics who made bad guesses and experimented  costing missery world wide. What is Canada sending our fighter jets to save the Petro Dollar anyways? Baird......You are a not "FOR THE PEOPLE".

roadhazard's picture

4th of July holiday is over and it's a good barometer on how bad the economy sucks. "Trouble in the Mid East" is not profitable anymore. I still think oil is too high.

swinger55's picture

Ms. Tverberg is the real deal.  I recently saw her pictured seated at a "meeting of the thoughtful minds", which also included James Howard Kunstler. Also recommend his blog as well.

jubber's picture

...So you are the leader of ISIS and have just come into 88 pounds of uranium, what do you do? dirty bomb in Tel Aviv? dirty bomb in Teheran, your sworn enemy?....or just perhaps as a boy you watched James Bond in Goldfinger.

Here is what i would do . make the dirty bomb put it  in a tanker, lorry whatever, drive into Saudi Arabia with the correct paperwork etc, then you let if off at Saudis biggest Oil field. Oil goes nuts $150, $200, ....$250?

The West is sent into an economic nightmare, Saudi Arabia is brutally damaged Bingo!