One good thing about Europe’s financial disaster is we should see lower prices at the pump in the near future.
Oil traded below $80 a barrel for a fourth day amid speculation that another meeting of European leaders this week will fail to halt the debt crisis that threatens to slow the economy, and curb fuel demand.
Chancellor Angela Merkel hardened her resistance to sharing euro-area debt to resolve the region’s financial crisis, while Moody’s Investors Service severely cut the ratings of 28 Spanish banks to essentially junk bond status.
“The ongoing problems in Europe continue to push down expected future crude oil consumption,” Mike Sander, an investment adviser at Sander Capital Advisors in Seattle, said in an e-mailed note today. A “macro-economic picture of slower global growth” is weighing on prices, he said.
Yeah, when countries are engulfed in deep economic depressions, it is kinda hard for everyday Joes and Janes to think about spending money for road trips, unless they happen to be fleeing their country. And, it’s summer, so no one needs any heating oil.
Some Persian Gulf members of the Organization of Petroleum Exporting Countries may trim exports if Brent crude stays within a range of $80 to $90 a barrel. So, in spite of falling demand, OPEC intends to hold price points (inventory) about where they are. Poor guys. You might want to stop building skyscrapers in Dubai, for a few months anyway. This Euro thing could get really ugly. And, I hear China might be cutting back on growth. Remember that scene in Syriana, where Matt Damon’s character chats with the Arab leader about oil economics?
War is Hell. Not in any way to celebrate the Global crisis, it doesn’t bother me that here in the U.S., we could see $3 gas again as early as July.