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Oil Prices Plunge To $38 A Barrel, Sparking Huge Recession Fears
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The price of U.S. oil dropped below $38 dollars on Monday for the first in six years, sparking fears amongst economists that a huge recession is on its way.
The last time the price of oil was as low as this, the world’s financial system was in meltdown with the U.S. economy in its worst recession since the Depression of the 1930’s.
Theeconomiccollapseblog.com reports:
The global head of oil research at Societe Generale, Mike Wittner, says that his “head is spinning” after the stunning drop in the price of oil on Monday. Just like during the last financial crisis, we have broken the psychologically important 40 dollar barrier, and there are concerns that we could go much lower from here…
One analyst told CNBC that he believes that we could soon see the price of U.S. oil go all the way down to 32 dollars a barrel…
“We’re in a tug-of-war between a heavily shorted market and a glut of oil in the U.S. and globally, as Saudi Arabia continues to produce oil at elevated levels to maintain market share,” said Chris Jarvis at Caprock Risk Management, an energy markets consultancy in Frederick, Maryland.
“Couple this with a strengthening dollar as the market anticipates a U.S. rate hike this month, oil is heading lower with a near term target of $32 for WTI.”
Analysts at Goldman Sachs are even more pessimistic than that. According to Business Insider, they are saying that we could eventually see the price of oil go below 20 dollars a barrel…
At OPEC’s meeting on Friday, member countries decided to set its production level at 31.5 million barrels per day, and did not agree on what the new limit should be.
After OPEC’s meeting, commodity strategists at Goldman put out a note saying that oil prices could plunge another 50% in the coming months, as the oil market tries to rebalance the supply and demand situation.
Source: http://truthisscary.com/2015/12/oil-prices-plunge-to-38-a-barrel-sparking-huge-recession-fears/
