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    Oil $25 :O ???

    Oil prices are likely to keep falling until well into next year and could reach $25 a barrel before recovering, U.S. bank Merrill Lynch has said.

    In a research report published on Thursday, it said oil prices should begin to rally in the second half of 2009.

    Merrill Lynch recently cut its forecast for the average price of U.S. crude oil futures and North Sea Brent crude oil to $50 a barrel from a previous estimate for both crudes of $90.

    "With demand vanishing across all key oil consuming regions, benchmark crude oil prices continue to plummet," it said.


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    "In the short-run, market participants will focus on both OPEC and perhaps even non-OPEC producer responses to balance the market."

    "A temporary drop below $25 is possible if the global recession extends to China and significant non-OPEC production cuts are required," it said.

    "In our view, oil prices could find a trough at the end of Q1 2009 or early Q2 2009 with the seasonal slowdown in demand. Then, as economic activity starts to strengthen, we see oil prices posting a modest recovery in the second half of 2009."

    Oil prices hit a peak above $147 a barrel in July but have fallen more than $100 since then as the severity of the global economic downturn has become clear.



    Merrill Lynch said a combination of high oil prices and high leverage had proven dangerous for the global economy.

    "On October 1, we lowered our average crude oil price forecast in 2009 to $90 per barrel based on a global GDP growth forecast of 3 percent. Since then, our economists have revised their 2009 global GDP growth forecast down to 1.3 percent, a scenario consistent with a global recession.

    "As a result, we are now lowering our average WTI and Brent crude oil price forecast to $50 per barrel for 2009."

    It said the major downside risk to its price forecast would be a revision of economic growth assumptions for China, which are currently at 8.6 percent for next year.

    "In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations," it said. "We now expect an outright contraction in global oil demand in 2009."
    KON DETA HAI OMAR BHAR KA SAHARA FARAZ
    LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

    #2
    Re: Oil $25 ???

    when oil was $145 i was getting a very awsome deal on a Land rover but didn buy it as everyone knows its a gas guzzler.
    now comeon dudes, buy pajeros, land rovers, escalade, navigator
    KON DETA HAI OMAR BHAR KA SAHARA FARAZ
    LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

    Comment


      #3
      Re: Oil $25 ???

      25$ oil... eww.. 2009 will be really painful..
      I disapprove of what you say, but I will defend to the death your right to say it.

      Comment


        #4
        Re: Oil $25 ???

        na i'd do anything for
        KON DETA HAI OMAR BHAR KA SAHARA FARAZ
        LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

        Comment


          #5
          Originally posted by EcoShan View Post
          na i'd do anything for
          oil stocks
          I disapprove of what you say, but I will defend to the death your right to say it.

          Comment


            #6
            Re: Oil $25 ???

            With oil prices as low as they are now, the gallon at the pump should be less than a buck.
            You have the right to remain silent, anything you say will be misquoted, then used against you.

            Comment


              #7
              Originally posted by EcoShan View Post
              when oil was $145 i was getting a very awsome deal on a Land rover but didn buy it as everyone knows its a gas guzzler.
              now comeon dudes, buy pajeros, land rovers, escalade, navigator
              Don't forget the 24's and stereo bought using a credit card with 24% APR.
              Paisa Koi Cheez Nahi Hai - Jay-Z and JD

              Comment


                #8
                We should start driving our SUVs again
                "The point is Allah. And everything besides Allah, is besides the point."

                Comment


                  #9
                  Re: Oil $25 ???

                  Actually part of the problem is the fact that OPEC is not properly governed, and is a group of countries that usually go their own way. In the last meeting, a cut in production was decided upon, which some member countries never acted upon. That resulted in a glut of oil with reserves rising in the US at a fast pace.
                  Next OPEC meeting is in a couple of weeks, and another cut is sure to be announced. If oil doesnt rebound significantly between now and then, (its $41 right now), OPEC will announce a major cut in production. Coupled with the fact that winter is setting in in the US, heating oil will be in high demand, so consumption will probably pick up sooner than thought. and that will probably stabilize oil prices in the $50-60 range. I will be very surprised if it goes down to 25, even though I saw it go to 40.95 today.
                  The Thread Killer!

                  Comment


                    #10
                    Re: Oil $25 ???

                    ^^ saudi arabia have itself violated opec decisions in the past.

                    yeah time again to drive SUV
                    KON DETA HAI OMAR BHAR KA SAHARA FARAZ
                    LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

                    Comment


                      #11
                      Re: Oil $25 ???

                      Ya Rite ... just like they were saying its gonna cross $200 this year.....
                      [ M ] - Awesome Wedding Photographer + Videographer in Canada

                      Comment


                        #12
                        Re: Oil $25 ???

                        ^ we know bro, but khush honey main kya harj hai.
                        KON DETA HAI OMAR BHAR KA SAHARA FARAZ
                        LOG TU JANAZAY MAIN BHI KAANDHAY BADAL'TE REHTE HAIN

                        Comment


                          #13
                          Originally posted by Asif2000 View Post
                          With oil prices as low as they are now, the gallon at the pump should be less than a buck.
                          Not really, $25 translates into something like $1.30s for us Texans

                          Comment


                            #14
                            Last time we had 25 dollar per barrel, US avg price at gas station was about $1.30


                            People are afraid of what they don't understand

                            Comment


                              #15
                              Re: Oil $25 ???

                              Q. Phooly na smana ko jumly main istymal kero:
                              A. Aj arsay draz ky baad bal ky pehli bar 13 dollar main gari full hu gai or main khushi sy phooli na smai
                              YAZEED-UN-Nisa!

                              Comment

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