Oil falls to $55
The Associated Press
Oil prices slid to near $55 a barrel Thursday in Asia as more bad economic news from the U.S. heightened fears of a severe global downturn that will pulverise demand for crude.Light, sweet crude for December delivery was down 81 cents to $55.35 a barrel, after falling as low as $55.03, in electronic trading on the New York Mercantile Exchange by midmorning in Singapore.
“There are fears of reduced demand through 2009,” said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. “Market sentiment is extremely bearish. It seems like there’s nothing that can stop the bears.”
The crude futures contract overnight fell $3.50 to settle at $56.16, the lowest closing price since January 2007, after the U.S. Energy Department slashed its 2009 oil consumption forecast.
Bad news for alternative energy, as this price is probably lower then what most of it can be produced at. This isn’t all bad news though. First off, lower energy prices are of course a boon to energy consumers, and secondly, a lot of people we don’t really like such as Iran, Venezuala and to a lesser extent the Saudis and Russians, utilize oil to prop up their autocratic states, low oil prices put a lot of pressure on them.
Between nuclear, hydro and solar America should be able to produce all the cheap, low environmental impact electricity we need. As far as gasoline for vehicles, I suppose alternative fuels could be found that would be efficient, economically viable and environmentally sound. I agree, it is unlikely they will be developed as long as oil prices are low, nevetheless, personally I cannot lament low fuel prices.
What I would really like to understand, however, is why fuel prices are linked to human emotions rather than the market like other goods. Perhaps someone out there could explain this.