Oil prices fall over $4 after hitting new record highs
Oil hit a new record high price of $111.80 yesterday morning, but settled at $105.68 later, a drop of $4.42 for the day. While we're not yet ready to suggest that an end has come to the daily rise in oil prices, seeing the price for a barrel of crude drop, if only for a day, is probably a bit of a relief to some. Before yesterday's drop in prices, many analysts were suggesting that the falling value of the dollar was the largest cause for the recent upward trend in oil prices. Another contributing factor are the Federal Reserve's recent rate cuts. Monday's drop in oil prices though, could possibly point to a more serious problem which has to do with the U.S. economy as a whole. Some analysts see the sale of investment bank Bear Stearns as a sign that our economy is in even worse shape than previously thought.We aren't stock market experts, so if you want to read more analysis related to the day's events, click here and here.
[Source: CNN Money, AP]
Reader Comments (Page 1 of 1)
rgseidl 4:04PM (3/18/2008)
Unless you're seriously investing in oil futures, tracking the lead indicators on a day-by-day basis is a waste of time.
With other asset-backed financial instruments tanking, institutional speculators will be driving up the price of oil again before the end of the week, feeding yet another asset bubble. Bernanke's efforts to fend off bankruptcies in the financial sector ("too big to fail") merely encourages brokers that are already leveraged 30:1 to take even more risks.
Meanwhile, letting the dollar slide has always been a popular strategy, because it reduces the value of treasury bonds purchased by foreign central banks desperate to keep their countries' exports to the US competitive. With Europe no longer playing this game, it's unclear how long Japan and China will do so. Without their support, the dollar would go into free fall, possibly turning a local recession into a global one.
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Blaine Decker 10:11AM (3/19/2008)
Just because the price of oil dropped, doesn't mean we will see it at the pump. No sir re. They will just hold steady. Give americans a break, please, why do you think Bush is an oil man, because they make the money, and keep it for themselves.
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