August 13, 2008
EVEN CARTEL MEMBERS EVENTUALLY COMPETE WITH EACH OTHER:
Oil at $75 a barrel? (Jamal Mecklai, August 13, 2008, Rediff)
I had been looking at a chart of oil prices and, while I'm no technical whiz (although I do have a passing sense of simple patterns like head-and-shoulders and the like), I noticed that if oil were to fall below $121.92 (the neck line of a S-H-S pattern) - as it has - it could (should?) fall all the way to $98. Of course, this, in itself, is no big shakes - an analysis we had done in April had forecast $100 (or a bit below) by year-end and a lot of forecasts today are calling for that level.But, looking more closely at the chart, I saw another possibility. As this pattern played out, the price could well bounce off $110, rise a bit and then resume its decline. This would set up - and trigger - another head and shoulders that would have a target at $75 to the barrel.
Now, that would be something, wouldn't it?
There is no historical reason to believe that the producing nations can maintain a profit margin that high. Posted by Orrin Judd at August 13, 2008 8:17 AM