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- Mar 3, 2005
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Oil dropped to less than $117 a barrel thanks to a strengthening US dollar. That means it has dropped 20% in the last month - the technical definition of a bear market (by contrast, oil rose by 200% in the previous year).
Oil has been dropping precipitously for the last month since reaching a high of $147 a barrel. The big reasons have been the worldwide slowdown, precipitated by collapsing housing prices, as well as a rebounding dollar that has recovered strength thanks to a weakening eurozone and a steady interest rate, and cutting of subsidies in developing nations like China and India.
At the rate things are going, there is even talk of gasoline returning to $2 a gallon (though certainly not the $1 it was in the early 2000s). On the other hand, others insist the market fundamentals of the futures market are still way off - big developing nations are subsidizing gasoline, while new supplies are shrinking and harder to get (think tar sands).
Your opinions?
Oil has been dropping precipitously for the last month since reaching a high of $147 a barrel. The big reasons have been the worldwide slowdown, precipitated by collapsing housing prices, as well as a rebounding dollar that has recovered strength thanks to a weakening eurozone and a steady interest rate, and cutting of subsidies in developing nations like China and India.
At the rate things are going, there is even talk of gasoline returning to $2 a gallon (though certainly not the $1 it was in the early 2000s). On the other hand, others insist the market fundamentals of the futures market are still way off - big developing nations are subsidizing gasoline, while new supplies are shrinking and harder to get (think tar sands).
Your opinions?