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The Case for $50 Oil

Source: http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold/0/0/the-case-for-50-oil
 Posted on Monday, November 10th, 2008 | In Energy Markets, Gold Markets
Contributed by: Sean Brodrick (http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold) -

Today I watched with morbid fascination as the price of oil hit a 21-month low of $59.10 only a few hours after trading above $65. The amusement came from the market’s realization that China’s $586 economic stimulus plan wouldn’t do squat to prop up weakening demand for crude.

Oil prices had also been supported two OPEC members who hinted of a second emergency meeting to talk about production cuts.

As currency trader Jack Crooks has told me over and over again, “Don’t listen to what others are telling you about the markets; listen to what the markets are telling you.” That mantra rings true today, and a good example is crude oil.

Today, crude oil broke below long-term support near $61 a barrel, and the market is telling me it’s likely to test intermediate support near $50 a barrel in the near future. Take a look at the chart, and you’ll see what I mean:

To me, it seems clear that oil has more room on the downside and it will at least test $50 a barrel as global demand dries up in the face of the worst financial crisis in decades.

John Burke, analyst

Last 5 posts by Sean Brodrick
About Sean Brodrick (http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold)

Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research’s small-caps specialist, especially in natural resources, and is the editor of the company’s Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.

Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world’s leading publisher of offshore asset protection strategies and global investment opportunities.

Recognized for his expertise on natural resources and Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box, Fox Business, CNN, The Glenn Beck Show, Your World with Neil Cavuto and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada’s premiere financial websites, HoweStreet.com. His report, “70 Days to Empty,” has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by The Daily Reckoning as “the most important report you’re likely to read this year,” while his knowledge of uranium has helped investors earn solid gains on the commodity.

Mr. Brodrick holds a B.A. degree from the University of Maine.

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The Case for $50 Oil

Source: http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold/0/0/the-case-for-50-oil
 Posted on Monday, November 10th, 2008 | In Energy Markets, Gold Markets
Contributed by: Sean Brodrick (http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold) -

Today I watched with morbid fascination as the price of oil hit a 21-month low of $59.10 only a few hours after trading above $65. The amusement came from the market’s realization that China’s $586 economic stimulus plan wouldn’t do squat to prop up weakening demand for crude.

Oil prices had also been supported two OPEC members who hinted of a second emergency meeting to talk about production cuts.

As currency trader Jack Crooks has told me over and over again, “Don’t listen to what others are telling you about the markets; listen to what the markets are telling you.” That mantra rings true today, and a good example is crude oil.

Today, crude oil broke below long-term support near $61 a barrel, and the market is telling me it’s likely to test intermediate support near $50 a barrel in the near future. Take a look at the chart, and you’ll see what I mean:

To me, it seems clear that oil has more room on the downside and it will at least test $50 a barrel as global demand dries up in the face of the worst financial crisis in decades.

John Burke, analyst

Last 5 posts by Sean Brodrick
About Sean Brodrick (http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold)

Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research’s small-caps specialist, especially in natural resources, and is the editor of the company’s Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.

Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world’s leading publisher of offshore asset protection strategies and global investment opportunities.

Recognized for his expertise on natural resources and Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box, Fox Business, CNN, The Glenn Beck Show, Your World with Neil Cavuto and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada’s premiere financial websites, HoweStreet.com. His report, “70 Days to Empty,” has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by The Daily Reckoning as “the most important report you’re likely to read this year,” while his knowledge of uranium has helped investors earn solid gains on the commodity.

Mr. Brodrick holds a B.A. degree from the University of Maine.

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