THEY COULD PROBABLY STABILIZE IT BACK AT $40:

Saudis Talk $75 Oil; Market May Aim at $35 (David Bird, 12/02/08, Dow Jones Newswires)

Technical analysts at Barclays Capital in London said that with oil prices well below important resistance areas in the $56-$61 area, there would be "every incentive to assume that the trend would continue beyond the recent low at $48.25" and test the next technical support level near $39.20 a barrel. That level hasn't been seen since July 2004, when prices moved above $40 a barrel and began the heady ascent to near $150 a barrel in July.

Barclays said "a cyclical bear trend has begun pointing to push toward the high $30s in the months ahead."

That suggests near-term prices closer to $35 a barrel than to $75. The Nymex futures market doesn't price crude at near $75 a barrel until the springtime of 2011.

Oil was the bubble. The credit crunch is a function of central banks not grasping that.

Posted by Orrin Judd at December 2, 2008 6:05 PM