Money Manager David Kotok: Plunging Oil Could Fall to $15

Tumbling Oil Prices have hit six-year lows, and Cumberland Advisors' David Kotok predicts that could plunge even lower.

"We could go back to $15 or $20, this is a downward slope, we don't know a bottom," the influential money manager told Bloomberg TV. A year ago, oil was about $100.

U.S. oil prices hit their lowest in almost six and a half years on Wednesday after U.S. data showed an unexpected rise in crude stockpiles.

U.S. crude oil futures, also known as West Texas Intermediate (WTI), were down $1.20 at $41.42 a barrel by 1450 GMT, after touching a low of $41.18. The front-month, September, U.S. crude oil contract is due to expire on Thursday. North Sea Brent crude was down 90 cents at $47.91 a barrel.

Oil has tumbled more than 30 percent since this year’s peak close in June amid signs that producers are maintaining output even after a surplus pushed prices into a bear market.

A further decline to $15 a barrel would be huge. Oil hasn't traded that low since early 1999, when gasoline at the pump was selling for under $1 a gallon, CNNMoney reported.

The Organization of Petroleum Exporting Countries has pumped above its 30 million-barrel-a-day quota for more than a year, according to data compiled by Bloomberg. Angola plans to ship 1.83 million barrels a day in October, the most since November 2011, according to a preliminary loading program obtained by Bloomberg. That compares with 1.77 million barrels a day from Africa’s second-largest crude producer in September.

Meanwhile, Iraq must increase oil output to meet the needs of its growing population and provide services, Prime Minister Haidar Al-Abadi said on his website. The nation’s production climbed to a record 4.18 million barrels a day in July, according to the International Energy Agency.

Via: Newsmax

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Beware of Falling Gas Prices: Ritholtz Chart

The American Automobile Association reports that the average price of a gallon of regular gas is $3.19. (The U.S. Energy Information Administration has regular gas at about $3.26).

Via: Bloomberg

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‘We can’t just drill our way to lower gas prices.’ Says who?!

Eighteen months of continued oil boom prove reveal the predictable flaws of Leftist energy dogma.

But you and I both know that with only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices – not when consume 20 percent of the world’s oil.

– Barack Obama, March 10, 2012

Oh, really?

That was the refrain during the election season of 2012, with average gasoline prices crowding $4.00 per gallon and no relief in sight. Democrats painted Republicans as wackos for thinking $2.50/gallon gasoline possible. But eighteen months have passed since the President’smisleading pronouncement: the U.S. is now poised to surpass Russia and Saudi Arabia as the the world’s #1 producer of oil and natural gas. The boom in domestic production continues, with oil production at levels not seen in a generation. Demand is soft, oil inventories are high and there is refinery capacity to spare.

And guess what? Gasoline prices are dropping. Color me unsurprised.

Source: Energy Information Administration
(http://www.eia.gov/oog/info/twip/twip_gasoline.html)

The scale of that graph masks the fact that the average price of gasoline is down 33¢ per gallon over the last 12 months and 70¢ per gallon since the spring of 2012. The reader should also bear in mind that the retail price of gasoline has embedded state and federal taxes which vary from 35¢ to 70¢ per gallon, depending on jurisdiction.

Via: Red State

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