Just a quick view of the news this morning and you see oil has dropped below $60 on ample supplies here in the US and worry about the US economy. Recently...and I am thining it was perhaps Friday, it came out that the economy slowed more than originally thought, triggering a thought that The Fed might have to reduce rates for the first time in 2+ years when it meets next.
Economy slows, jobs are not created, people generally have less to spend and you add to that stockpiles of oil and gas then it sends energy prices downward.
Ok, so all we need now is China's economy to overheat (wages don't keep up with inflation) or for their economy to slow regardless of reason. That would take further pressure off oil and send it downward even more. I would suggest that China's booming ecomomy over the past 3-4 years alone may be responsible for up to $15 of the $60 barrel of oil.
It may even shut up ex paratrooper Hugo Chavez or cause to have him replaced. He has stayed in power only because he is redistributing Venezuela's oil wealth. The higher the price of oil, the more he has to give to the less fortunate who are the majority of that country's electorate.
Strangly enough....should China's economy slow the one repercussion we may be faced with is paying slightly higher prices for goods purchased at Wal Mart.
Right now on NYMEX we are seeing commodity energy prices at levels we haven't seen in at least two years.
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