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This Is Why $20 Oil Is A Possibility
Submitted by Euan Mearns via OilPrice.com,
The day of reckoning has arrived for the oil price with the head and shoulders pattern I have been tracking for two months finally being completed in recent weeks. It became a rather drawn out affair with markets awaiting the outcome of the OPEC meeting of 4 December where OPEC elected to stay the course and do nothing. With WTI closing at $40 and Brent on $43 on Friday both are testing support levels. WTI in particular has had strong support at $40 in recent weeks. Should this support be broken then another major down leg is to be expected to the vicinity of $20. I can see nothing in the numbers presented below to provide hope that $40 may hold. The market remains over-supplied and awash in oil. Lower price is required to remove supply from the market.
- World total liquids production up 240,000 bpd to 97.09 Mbpd, a new record high.
- OPEC production down 20,000 bpd to 31.72 Mbpd (C+C)
- N America production up 260,000 bpd to 19.66 Mbpd.
- Russia and FSU up 90,000 bpd to 14.01 Mbpd
- Europe down 10,000 bpd to 3.40 Mbpd (compared with October 2014)
- Asia down 50,000 bpd to 7.99 Mbpd.
- Middle East rig count is rising. The international oil rig count is stable. The US oil rig count is falling.

Figure 1 The oil price has trended down this month in a saw tooth pattern to support levels and to complete the head and shoulders pattern. Friday’s close was just above the near term lows of $38.22 for WTI and $41.59 for Brent, both on August 24th. If these lows are broken traders and companies should be prepared for a plunge.
The October 2015 Vital Statistics are here. EIA oil price and Baker Hughes rig count charts are updated to the beginning of December 2015, the remaining oil production charts are updated to October 2015 using the IEA OMR data.

Figure 2 The bigger picture shows how the second shoulder has already breached the long-term trend line and the chart appears to be very bearish. Chart patterns alone do not tell the whole story, but it is difficult to find ANY near term bullish indicators in the production and rig count data.

Figure 3 The US oil rig count has resumed its fall but at a lower pace than the plunge post-October 2014. The blip represents 675 rigs on 28 August and has since fallen to 545 oil rigs on 4th December, a fall of 130 rigs in 14 weeks. At this rate the 200 count will arrive in 38 weeks, sometime in September 2016. A fresh plunge in the oil price may accelerate this process. 545 rigs still drilling, used to drill better wells in sweet spots, is sufficient to substantially offset declines which is why US production is trending down only slowly. In my analysis of US Shale Oil: drilling productivity and decline rates (June 2015) I forecast that LTO production would fall 830,000 bpd with about 630 rigs drilling. The fall in US production so far has been 540,000 bpd. A large backlog of drilled and uncompleted wells complicates this picture.

Figure 4 This expanded scale shows that the rate of decline in US oil directed drilling is muted compared with the big drop seen earlier this year. Gas drilling has flat lined at around 200 units. The total rig count was 737 on 4 December compared with a post-crash low of 876 seen on 20 June 2009. Hence, the current drilling slump is already worse than the post-crash slump and there is no respite in sight.

Figure 5 The near-term peak in US production was 13.24 Mbpd in April 2015. The October figure was 12.70 Mbpd, down 540,000 bpd from that peak. US oil production has been amazingly resilient in the face of the collapse in drilling. In recent post, Art Berman points out The Problem With Oil Prices Is That They Are Not Low Enough. And that’s why I believe that another plunge in the oil price is required to thrust a dagger through the heart of US shale drillers and the banks that have supported them. To be clear, low oil prices are wonderful for the US economy and a nightmare for OPEC.

Figure 6 OPEC production stands at 31.72 Mbpd down 20,000 bpd on September which is effectively unchanged. This level was first attained in the summer of 2008, at the end of the great energy squeeze in the lead up to the financial crash. This appears to define a plateau level in OPEC production. There has been very little action in the OPEC producers, all pumping flat out, pouring gasoline on the bonfire of oil wealth destruction. Iran is waiting in the wings to introduce a further 720,000 bpd (IEA) when / if sanctions are lifted early 2016.

Figure 7 OPEC booked spare production capacity stands at 3.18 Mbpd with 2.01 in Saudi, 0.72 in Iran and 0.45 in the rest. One has to be skeptical about Saudi Arabia’s 2 Mbpd and OPEC, with the exception of Iran, is pumping flat out. There is of course degraded and unused capacity in Libya.

Figure 8 In October Saudi production rose by 50,000 bpd to 10.23 Mbpd. NZ = neutral zone which is neutral territory that lies between Saudi Arabia and Kuwait where production from the Wafra heavy oil field is now effectively zero.

Figure 9 The ME OPEC oil rig count is on a rising trend with operational cycles superimposed. In October, ME OPEC rig count began inching up once more with the main action in UAE that added 8 oil rigs. This is a sure sign that ME OPEC are pumping at capacity and need to drill new wells to cancel declines and to maintain plateau production. This also underlines the determination of the big ME OPEC producers to maintain production levels that is BAD news for the OECD producers and Russia.

Figure 10 The international oil rig count has been stable for 6 months. Total international rigs are down 17 to 854. This number is still substantially above the 2008 peak of 832 units (dashed line). While the international oil industry is racking up huge losses, the level of drilling activity still exceeds the previous high of 7 years ago. I suspect that the pause in the fall will shortly reverse as it did in the USA and we will see many more rigs layed up in the first half of 2016.

Figure 11 Russia and other FSU produced 14.01 Mbpd in October, up 90,000 bpd on September but little changed for 3 years.

Figure 12 The cycles in European production data are down to summer maintenance programs in the offshore North Sea province. To get an idea of trend it is necessary to compare production with the same month a year ago. The dashed line shows that European production has been essentially flat for three years. The post-peak declines have been arrested. Compared with Oct 2014, European production is down 10,000 bpd to 3.4 Mbpd. Declining North Sea production was one of the drivers behind the rise in oil prices since 2002. Arresting and reversing those declines has removed that driver.
- Norway Oct 2014 = 1.93 Mbpd; Oct 2015 = 1.91 Mbpd; down 20,000 bpd YOY
- UK Oct 2014 = 0.88 Mbpd; Oct 2015 = 0.95 Mbpd; up 70,000 bpd YOY
- Other Oct 2014 = 0.60 Mbpd; Oct 2015 = 0.54 Mbpd; down 60,000 bpd YOY

Figure 13 This group of S and E Asian producers has been trending sideways since 2010. The group produced 7.99 Mbpd in October, down 50,000 bpd on the revised September figure.

Figure 14 N American production looks like it topped in April at 20.12 Mbpd:
- USA Sep 2015 12.73 Mbpd; Oct 2015 12.70 Mbpd; down 30,000 bpd
- Canada Sep 2015 4.08 Mbpd; Oct 2015 4.35 Mbpd; up 270,000 bpd
- Mexico Sep 2015 2.59 Mbpd; Oct 2015 2.61 Mbpd; up 20,000 bpd
Group production up 260,000 bpd from September to 19.66 Mbpd in October. Group production down 460,000 bpd from the April peak. Canadian production dipped in September but bounced back in October.

Figure 15 Total liquids = crude oil + condensate + natural gas liquids + refinery gains + biofuel. October production was 97.09 Mbpd up 510,000 bpd on the revised September figure. The October figure sets a new global production record, up 10,000 bpd on the prior July 2015 high. Global production remains 3 Mbpd above the 2004-15 trendline and has a long way to fall to restore balance to the market.

Figure 16 This great chart from Art Berman brings it all together. The oil price crash is simply explained by supply and demand. What we are witnessing is “unprecedented” over supply. Huge supply growth momentum was built during the era of record high price that also acted as a drag on the global economy. Low price will at some point result in the situation reversing and the price will turn very quickly. Predicting when that will happen is gold dust. But before that can happen, the production momentum needs to be switched off and I dare say that requires sharply lower oil price in the near term.
Concluding Comments
After a year of "Oil Price Crash" in October the world managed record production of 97.09 Mbpd. Production momentum built in the period of high price, 2007 to 2014, is proving very difficult to switch off. It must be switched off and it seems to me the most likely scenario is sharply lower oil price in the near term. The geo-political backdrop also has mounting hazards and uncertainty with the USA, Russia, The UK, France and Germany all operating in the same combat arena, chasing a phantom menace.
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This is a blatant response to Russia's intervention and to keep their house of cards up by the Saudi Klan. They are the Wahabis, Don't ever trust them.
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My cousin's best friend's sister makes $5,000 per week working only in her panties.
...in your cousin's panties?
I know his cousin and her best friend.
I worked in their panties TOO:
http://goo.gl/xFQREO
Pictures or it didn't happen.
In an environment where even a big market like oil can be manipulated for a time, that head and shoulder pattern looks to weak to hang a hat on.
The louder Goldman's calls for $20 oil... the less I believe it.
Exactly, The floor is in. Like all these pretty graphs fucking matter with other technical analysis. Ever heard of HFT's and the FED to the author of this piece of journalism...fucking asshat.
Just remember, if you want high prices of gold and silver, then you want high oil prices. Because all 3 will rise together when shit hits the fan. So you can't not pull for cheap oil and expensive silver/gold. Don't be a fucking idiot. If you want a premium then you have to be pulling for premium prices across the board.
Another reason the floor is in on Crude(CL Jan 2016 contract). The number 36.66 is the bottom. Just like Nasdaq futures hanging around 4666. These fucks love their baal. You may be a dumbass atheist, but they believe in their baal worship. They pimp it on your goy mind all day long. Numbers, they fucking love em.
To the down arrow above , why do you disagree. Don't be a coward.
I disagree (no homo) the shit hitting the fan will be deflationary not inflationary so the prices of Gold, Silver, oil, copper, iron... will go lower, lowering profits increasing loses, leading to lower wages/ layoffs / foreclosures. It's gonna be a mess but not an inflationary mess.
Well I changed it but thank you for stating why.
If there is lower wages/layoffs/ and foreclosures which sounds like the past 8 years or so, I see nothing but inflation. Maybe I am wrong, as I know for a fact inflation exists when I grocery shop. They are even being sneaky about inflation by charging the same for an ounce or so less.
The reason I think it will be deflationary is because all the QE didn't go to the public, it went on balance sheets so when it goes it will just vanish. Fewer dollars chasing same amount of goods, deflation. Now if the fed just gave everyone (joe six pack) a check for $200,000 I would totally agree with you. They wanted to spark asset inflation in the paper bull shit (futures contracts/ derivatives ) without helping the regular folks out to protect the bankers mortgage debts / credit card debts. They made that mistake. No doubt the grocery store has had plenty of inflation, hell skirt steak has gone from 5.99 lb to 12.99 lb from 2008 to current. Product shrinkage etc.
I think we agree it will be total bullshit when it happens. Now i have to say this. I can remember Bush W giving checks to a lot of households to stimulate the economy. See people forget even they were bailed out. Of course Uncle Sam fucked everyone on taxes with it but at the time it was a bail out for Joe.
the thing is. $20 oil is no big deal.
The driver is still paying the same. All a falling oil price does is widen the spread between producers and refiners, both of which are generally under the umbrella of Big Oil
I put a rather large fraction of our retirement stash in oil back around $90/bbl. I doubled up at $50. Do I slit my throat now or double up again at $20?
Go all in at 20
Inflation is not the only cause of higher prices. The financial authorities have been creating money like Scotty makes toilet paper. That inflation is very real. The problem is that our fractional reserve system means someone must borrow that money to get it into the economy. That system has resulted in far too much debt being created for the newly created money to service.
I suspect that many prices that are rising are the result of shortages created by legislators interfering in the economy. Whether it's rules affecting producers, sanctions or outright war, government is the cause of rising prices.
At some point the financial sector will have to create money outside of the fractional reserve paradigm. Once that begins you will see your inflation as the the price of almost everything will rise. Bankers will resist that as long as possible because it undermines the power they enjoy through the current system.
I disagree because GS has called for $200/B in the past and were off badly. They are no experts just pontificating SWAG types that get a lot of media. In the 1980s we were at ~$15/B so assuming inflation (real) at about 5%/year it would bottom out around the $30/B range this time. That of course is just my SWAG but it's as good as anyone's including GS.
It's the time to buy when there's oil in the streets. I heard someone say that once.
Maybe so. But the Bakken has 1,600 additional wells year over year but LOWER production. The oil market will never be stable again.
If you inflation adjust that price on WTI, it is really, really ugly out there.
Indeed. Oil first passed $40/bbl in 1974 when the A-rabs shut off the tap. Lotta inflation between then and now.
I think ZH just jinxed it.
I'll take $1.00 a gallon gas any day.
Not sure if you noticed but since I can get gas below $2.00/gallon I've practically been living at the dragstrip every weekend. And the weather's even been holding out here on the east coast. Gotta take these little victories when you can.
You can just hope it's available for the masses. You can have cheap gas with no one being able to afford it.
Which makes it even cheaper, for a while.
Won't happen, even in the US. In Canuckistan we have a fixed bottom-price for gas at the pumps, set by the gov't. The retail price will never drop below a certain level where tax and fee revenues begin to get squeezed. That will never, ever be allowed to happen. Just like gold, certain prices are carefully controlled to keep the casino in business.
edit: I should qualify that a bit: The price at the pump in the US only might very well drop below a dollar, but only briefly. The treasury will step in a some point and stop the loses, but that price point is well below everywhere else. I am hoping you folks south of 49 get some kind of fun out of all this. We certainly won't.
It was as low as $0.79/liter in Edmonton this week, that's about U$0.59 or as low as it was in the 1990s. Will it reach $0.40/liter, which is what it was when I started driving -- signs point to yes.
$1.61 here in south texas. but $2.30 for my desiel...
As a diesel man myself I always curse the price because it is cheaper to make diesel than Gas.
not if you're refining ULSD it isn't...
Gas is cheaper to make than diesel.
You get 20+ gallons of gasoline from a barrel of crude, but only 12 gallons of diesel. And as noted by others, ULSD is expensive to refine to remove the sulphur.
The price difference between diesel and gasoline is almost totally taxes.
The price difference between diesel and gasoline is almost totally taxes.
When should we expect to pay less for food? Oh, that's right, that will never go down due to less fuel costs...ever again.
What surprises me most is how the sheeple actually see this obvious gerrymandering of the "free" markit, yet they continue to passively chew their cud, believing in things like the "law" of supply and demand etc. What a fucking joke.
why is oil or anthing traded in worthless USD? Time to end that now
By about 10/16 it will no longer be, at least that's the writting on the wall or the SDR basket.
A lot of oil is already being priced in other currencies.
The percentage in USD will decline over time because the USA is now a massive debtor country, with no way to pay in real terms (no one wants zimbabwe bucks from Yellen).
+1,000....
Winner, winner, winner.
The rest of the world has been moving away from the dollar hegemony. Bye bye america. Bye bye dollar. But, that's what happens when you print like crazy, and have no way of ever paying it back. you can blame all congresses and presidents going back 100 years. They've all willfully kicked the can and rejected their fiduciary responsibilities. Hang them all.
I don't disagree wholly but I think the time line is more like US dollar shits the bed in like 2025 not next year.
Actually, the rest of the world hasn't been moving away from the US dollar. In fact, they are moving TO the US dollar, and that's why it's soaring the past couple years.
Sure, they are TRYING to move away from it, but not very successfully.
I want joobux. Every fucking idiot in USA and the world loves joobux. I can give them joobux for real assets. I hope the party never ends. It is so fucking awesome acquiring real products for joobux.
Those ISIS-guys are trying :p
https://www.youtube.com/watch?v=BG7YXKE4x3w
will be worse than 1986.........June 20, 1986: $9.60 / Bbl.
see thru buildings - Tulsa to Houston
Here's a simpler reason why crude is headed to $20 and maybe lower:
http://finviz.com/futures_charts.ashx?t=CL&p=m1
This author and Dennis Gartman are both predicting $20 oil.
Neither explained why oil workers are going to work for free instead of collecting welfare when oil hits... ~$35/bbl where it is now.
Either the Fed's manipulation stops (they stop subsidizing money losing shale drilling and zombie banks with cheap debt), or the workers don't get paid and they go home. Oil stops getting produced, and the price skyrockets later.
All I know is the prostitutes are already clearing out of North Dakota (for the past few months). Welfare agents will be rolling in soon, oil that was already pimped (whoops, pumped) will be put on Warren Buffett trains. And then its lights out
ND means nothing to the oil market, then again the market means nothing either. However you roll these dice, falling down is part of the deal. The USD reserve status is done, thanks to the .001% who wished it to be. They have been buying gold in waiting for the new reserve currency, the Yuan in the fall, which will be priced against gold.
The Chinese don't let their currency float on the market how can you tell me that they will be the reserve currency? That imho needs to happen first.
Sure it'll skyrocket later. The plan is to bankrupt Russia, overthrow Putin, and then snatch up both Russia's and North Dakota's oil at a fraction of fair value.
To make sure the right people---banksters and Arab princes---reap the rewards.
It will skyrocket later because the Fed can manipulate prices, but they cannot manipulate value.
Even the enviro-terrorists need oil to keep warm, drive their cars to protests, etc. Obama needs a lot of oil to fly Air Force One back and forth to Paris and Hawaii.
Bernanke/Yellen made fracking happen with ultra cheap credit (horizontal drilling and other technology had been around since the 1980s).
I would bet Obama will be out of office LONG before Putin -- except that is hardly a fair bet. Obama will mercifully go back to terrorizing Chicago in a little over one year. Putin's term has a long way to go. Russia has endured far worse hardships, and Putin's popularity in Russia is higher than JFK or Reagan ever were in the US.
'they' side attempt is to take down Bank of North Dakota with this...
Gold/oil ratio says fair value for oil is USD67 a barrel at least. Riyadh will run out of financial ammo eventually.
This is one of those times where it actually makes sense to BTFD.
Long oil, Russia and Israel.
Short debt, socialism and Islam.
Will they give in before the tumbleweeds appear on the streets of Tombstone, I mean Williston?
Wait until the end of the year retail sales figures come in.
Plenty of layoffs on their way.
No, what is needed is economic activity that derives value from the use of energy. Global economies are slowing down, so less demand for oil. Even if oil were being given away for free, if it can't be used it for something useful, it then has no value
"To be clear, low oil prices are wonderful for the US economy and a nightmare for OPEC."
Say this again if/when the wave of defaults really gets going whilst the pink slips continue to fly.
I don't think we'll see 20.
I don't think we'll break below 30.
Just like I'll never see milk below $3 a gallon. Or steak below $20 a pound. Or a good loaf of bread below $5. There's just too much profit to be made for these "service" stations.
service stations make most of their money off snacks and coffee, not gasoline.
Get as mad as you want about that, but its still true. Every time gasoline prices "should" drop (because oil drops), a socialist proposes raising the gasoline tax.
Oil prices go up: oil producers benefit (which is fair)
Oil prices go down: socialist raise gas taxes and they benefit, not consumers.
But even if crude oil was free, gasoline would still cost $1 a gallon because of all the other costs of getting it to market.
Plus, like you said TAXES.
madcows, Wherever you live, you need to move.
Milk, Whole, Vit D $2.49 every day at the convenience store even.
Best steak is "only" $12 lb and good stuff for $10 and I still won't pay it, ain't wally prices either.
name brand split top wheat bread $3.49 yesterday and I went for the store brand at $1.99
Shit is higher than hell but you are burning in it.
luck to you.
It's laughable that there was a recent "Green" summit in Paris where all the world leaders were blabbering to see who could outdo the other with (fake) promises to cut GHGs.
And at the SAME TIME oil production continues to rise to RECORD HIGHS?
Reality meets rose coloured glasses.
Bankrupt fracking companies are emptying their storage tanks, desperately trying to get free cash flow to pay interest on their high yield debt. That isn't "production", that is just previously drilled oil getting transport.
"All the world leaders" (the left wing members of the G7 and their massive entourages anyway) flew to Paris in oil powered airplanes, then transferred to oil powered helicopters, then stayed in hotels powered heated with natural gas and electricity generated from oil and nuclear power. Then they got in oil powered limousines to go eat a five star meal (cooked with natural gas) that most of their citizens will never even see much less eat.
Your comment about fracking companies "emptying their storage tanks" isn't accurate. Except for low yield wells, the volume of storage is tiny compared to flow of oil they have on a monthly basis. And if the wells are low yield, then the total volumes are insignifficant to the market.
Because the wells are low yield, it does not pay (and didn't pay at higher prices) to have a train car waiting to be loaded. The car (or tanker truck) would have sat idle for days, maybe weeks.
The low yield stuff gets pumped into local (small) storage tanks, and when they accumulate enough inventory to make it economically worthwhile, they call in a tanker truck/train car and ship it to market.
Those storage tanks are being abandoned, and they are moving smaller quantities in smaller trucks to market -- desperate to generate cashflow to pay interest only, and stay in business a few days more.
They are praying for prices to normalize quickly, before creditors seize equipment. Creditors are reluctant to seize equipment because they know it will get liquidated cheap (over investment thanks to bernanke/yellen's cheap debt --> too much equipment bought on credit).
Its all about staying one step ahead of a sheriff's sale now.
. (duplicate post?)
These oil guys are funny. They never met up with this situation before. They think "pump it and they will come". I got really used to being a cheapskate with energy. We were all told to do so. Do three things on every trip, upgraded my heating system, put all LED bulbs in my house. My energy bill dropped 30%! Crap, I even put energy saving xenons in my truck. Less watts, less drag on the alternator, fuel saved. Even if the price of gas and oil goes down, I will only buy what I need. I'm not going to increase my "joyride" time, or crank up the heat. I have savings now I'd rather spend elsewhere. Now after this push for efficiency comes a slowing world economy. The perfect storm.
I think this could be distilled down some.
Why is there so much excess production? And why is it so hard to turn off? This is a direct consequence of Federal Reserve easing. Malinvestment in energy and excess leverage leading to debt service issues were triggered by the search for yield.
"Malinvestment in energy and excess leverage" - That and OPEC holding prices artifically higher than they would normally be in a non-manipulated market. The irony is that OPEC and the Saudis created the invasion into their markets they are now trying to starve out of existence. Tell me how they came out ahead doing the initial manipulating? Yes, fracking popped up as a get rich quick energy method, and the Fed piled on the money. Now all the players can't shut down the rigs, because they immediately default on the loans. Friggin' mess is what it is.
40 should be the inflation adjusted right price.
I do hope that people realize that cheaper oil then that is really really bad for our economy even as paying less at the pump is fun, the oil industry worldwide is hughe!
Machineing, tooling, logistics... you name it.
Better not start thinking that being unemployed and a cheaper tank of gas is better then employed and a bit more expensive tanks of gas because you won't be using that cheap gas if you're out of a job. And a lot of industries are interconnected. You'd be amazed. Trickle down effects do exist.
Won't someone please think of the bankers? /sarc
Seriously, a lot of Americans have money in high yield bond funds and/or banks that own high yield debt from fracking companies. If oil stays below $60, the bankers are going to demand more bailouts, or they are going to shove the losses on consumers and our retirement savings.
I feel pretty safe in thinking the bankers will not absorb the losses, and consumers will.
Oil was $30 a barrel when Obama took office in 2009. Ben starts QE in april 2009 , and it eventually reaches $100. Ma Yellen ends QE in Oct 2014 and oil begins to crash right back to $30. Sometimes correlation IS due to causation. :~)
Talk about revisionist history... WTI crude bottomed around $38 in 2009, as over-indebted wholesalers panic dumped inventory at firesale prices.
Never got below $38
These fracking companies sound very similar to Santelli's deadbeat homeowners. They took on more debt than they could handle. I say if the gubmint even hints at helping these energy deadbeats, we all unite and form a new American Tea Party. (Insert Howard Dean insane yelp)
Bring it on, if $20 is not bottom, what is it, free oil?
We are soft-landing to the bottom. You can not pin-point exact bottom, but we are closer day by day.
Something has to break. Lots of those rigs are kept running in an attempt to continue to service the loans they have to pay. But consumption is staying stubbornly low. What happens next? Defaults. What else is there? Well, we know. It's called bank bail-ins. Asset confiscation. Nasty. Ugly. Not pretty. We are getting there.
LOL!! In the absence of true price discovery, anything is possible. Gold could be fifty cents an ounce, taking delivery would be something else altogether...
All these calls for $20 or free oil seem bullish. I'm not joking. Everyone always assumes everything is going to zero. Oh my god, Coca Cola went down slightly! It will go to zero!! Oh no, panic sell Walmart before it goes to zero!!
As always, use common sense when buying a crisis asset. Don't bet your rent money on this. Don't put all of your eggs in one basket. Only buy companies that will probably exist 50 years from now. Only buy at this time if you already have about 20% or more of your investment account sitting in cash.
Didn't Mike Maloney a couple of years ago give a conference presentation (saw it on YouTube) where he predicted Oil would possibly drop down to as low as $10 a barrell? Anyone remember?
Car market has been growing in Europe for 2 years now..if that falls.....
$10
We're probably going to have to wait until CHN and IND both resume good GDP rate increases (we're talking not taking into acct ghost cities, bridges to nowhere, Predatory Lending, and rampant Mkt Margin Abuses and Manipulations), since USA's non-MIC&Auto Sectors exposed to Mfg aren't going anywhere upwards for a long time.