Oil tumbles below $40 for first time since 2004

Source: AP

Oil prices tumbled below $40 for the first time since the summer of 2004 Wednesday despite an announcement from OPEC of a record production cut of 2.2 million barrels a day.

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Light, sweet crude for January delivery tumbled 8 percent, or $3.54, to settle at $40.06 on the New York Mercantile Exchange. Benchmark crude prices fell as low as $39.88, a price last seen in July 2004.

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The last time oil prices dipped below $40 a barrel was July 21, 2004. Prices settled that day at $40.09, according to Peter Beutel, an oil analyst at Cameron Hanover.

Many analysts believe oil prices will continue falling next year with agencies ranging from the U.S. Department of Energy to the International Energy Agency forecasting weak demand.

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Read more: http://news.yahoo.com/s/ap/20081217/ap_on_bi_ge/oil_prices

Unfortunately neither are alternative fuels using the traditional arguments liked by the right. We on the left will have our work cut our for ourselves convincing the rest that they're still a good idea... The key is the national security argument.

I want high oil prices. That's the only thing that makes people conserve and use alternative energy. High coal prices would be even better.

...high prices really help the poor and those that are struggling.

Greater good and all that, eh??

:eyes:

:thumbsup:

I believe that the long term benefits outweigh the short term problems.

when OPEC commanded and everyone followed the Saudis into overpriced oil heaven. Back then, only the consumer had to pay because the government thinks American citizens are nothing more than a mark for anyone to con.

Now Americans don't have enough money to play the con game or pay for the royal's yachts and palaces. If they keep cutting the supply, eventually they will get to that magic number, maybe...

But it won't work.

While, it is far less exciting for the alternative energy companies (from a near term profit potential), I think this was a wake up call...they will still have a mandate...and under Obama, I would expect that these companies will get support.

Either that or the effect of the cut has not kicked in yet.

I am sure that gas prices will spike next week and remain higher through the holidays.

that said the oil producer nations are running out of places to store the oil and are putting them in tankers offshore. They used a strange term for the situation of over-supply-- "cantango" and are frantic about the prices going down. They are storing the stuff rather than selling it because they want the price to come up (wouldn't that be called hoarding? price manipulation?).

I find it very curious and wondering if everyone else feels enron-ed.

The contract for Jan delivery actually expires tomorrow...and starting Monday, the front month contract will be for Feb delivery. The difference (Contango is when the months further out cost more than near months - ie an upward sloping futures curve) between the Jan and Feb contract are about $4...and it is true that there is so much oversupply that crude is being stored in supertankers. Frontline (ticker: FRO) has oil stored in 25 of its tankers right now! Each holds 25MM barrels.

Inflation flared up - said to be caused by energy prices. Where are the rollbacks?

It was $1.49 and now its $1.75....

Alot better than $3 a gallon, but it should be cheaper by now...