Oil tumbles more than 9 percent, breaks below $100 as recession fears mount

The headline says it all...

Oil tumbles more than 9%, breaks below $100 as recession fears mount

Isn't this exactly what most of our Oil and Gas ATSers thought would happen if Biden were allowed to be President? We are chopping off an industry at its knees when we desperately need it. This feel-good legislation is just BS, but it's hard now to know who to follow and listen to.

Citi said Tuesday that Brent could fall to $65 by the end of this year should the economy tip into a recession.

yet Forbes says we are already in one..

www.forbes.com... /?sh=4b813ff61c66

A highly watched economic indicator with a good track record in predicting recessions cut its forecast for second-quarter gross domestic product growth this week, implying the nation has fallen into a technical recession despite economists widely calling for a return to growth in the second quarter.

www.cnbc.com...

Oil prices tumbled Tuesday with the U.S. benchmark falling below $100 as recession fears grow, sparking fears that an economic slowdown will cut demand for petroleum products.

West Texas Intermediate crude, the U.S. oil benchmark, slid 9%, or $9.83, to trade at $98.60 per barrel. The contract last traded under $100 on May 11.

International benchmark Brent crude shed 9.9%, or $11.46, to trade at $102.04 per barrel Tuesday.

Ritterbusch and Associates attributed the move to “tightness in global oil balances increasingly being countered by strong likelihood of recession that has begun to curtail oil demand.”

″[T]he oil market appears to be homing in on some recent weakening in apparent demand for gasoline and diesel,” the firm wrote in a note to clients.

Both contracts posted losses in June, snapping six straight months of gains as recession fears cause Wall Street to reconsider the demand outlook.

Citi said Tuesday that Brent could fall to $65 by the end of this year should the economy tip into a recession.

“In a recession scenario with rising unemployment, household and corporate bankruptcies, commodities would chase a falling cost curve as costs deflate and margins turn negative to drive supply curtailments,” the firm wrote in a note to clients.

Wait until property values are destroyed. I think recession will become depression once that happens.

originally posted by: greendust
Wait until property values are destroyed.

How does that occur?

To the OP, are dropping oil prices good or bad? That happens by either producing more oil than needed or using less oil than being produced. The world production of oil is a balancing act and that is why even the smaller amount of fracking quickly drove the price to like 30 bucks a barrel, it doesn't take much either way to drive it up (Russia oil off the market), or down as in someone produces more oil than normal.

In this case I bet people are using less gas due to the high price.

A recession and a depression describe periods during which the economy shrinks, but they differ in severity, duration, and scale.
A recession is a decline in economic activity spread across the economy that lasts more than a few months.
A depression is a more extreme economic downturn, and there has only been one in US history: The Great Depression, which lasted from 1929 to 1939.

I think it's safe to say this so-called recession is going to take more than ten years to come back from- if we even can. The linked article goes into feel-good detail on why a depression can't happen, and a recession is highly unlikely. They even have numbers to back it up- but looking at the world around me, I have to question their statistics.

[www.businessinsider.com...]

originally posted by: AugustusMasonicus

originally posted by: greendust
Wait until property values are destroyed.

How does that occur?

It seems you have an opinion here, please tell?

My thoughts are that my little home has risen about 100,000 dollars in value over the last couple of years. This is ridiculous as larger owners (in a corporate sense) get loans and advances (as well as individuals) based on their total wealth - among other things. If my personal value drops say 200,000 dollars in less than a year, how does that affect me? Not good that is for sure - but even more important is how does it affect large corporations that actually employ people? What will they do? What decisions will they make based on their extreme loss of wealth?

No matter really though, we seem to all hate ourselves in the west and if economics dont kill us we will make sure and do it some other way.

a reply to: greendust

I'm asking you the mechanism for which this drop occurs.

a reply to: putnam6

Recession is better than BidenInflation for me.

originally posted by: AugustusMasonicus
a reply to: greendust

I'm asking you the mechanism for which this drop occurs.

No one able to afford property or buying new property and therefore demand dissolves forcing a massive reduction in value. I could be wrong, I could be right. Who knows?

I suppose a current issue that doesn't vibe with my thoughts is there certainly is not a lack of employment opportunities at the moment.

originally posted by: greendust
No one able to afford property or buying new property and therefore demand dissolves forcing a massive reduction in value. I could be wrong, I could be right. Who knows?

If property comes down it's no longer high priced which creates a buying opportunity.

originally posted by: AugustusMasonicus

originally posted by: greendust
No one able to afford property or buying new property and therefore demand dissolves forcing a massive reduction in value. I could be wrong, I could be right. Who knows?

If property comes down it's no longer high priced which creates a buying opportunity.

I suppose you are right, but it does depend on if people can have solid employment.

My view: the people in power got too far out over their skies with the "Let's make people pay through the nose for gas!" scheme. This translated into a main driver in the runaway inflation the U.S. economy has experienced since 2021.

The people in charge didn't plan for just how ridiculously pricey everyday goods/services would become by balooning oil prices to this extent. This issue has put the political party currently at the wheel in very real peril for 2022/2024.

Hence, the people in power are now at least making some efforts, and not just token gestures, to get the price of oil down, as an act of political self-preservation. Unfortunately, the damage has been done, and we are seeing the fruits of their labor/energy policies with the contraction of the economy and faltering equity markets.

It turns out that when you install "Green" zealots into a socio-economic system that is, for better or worse, still running on fossil fuels, and hasn't properly laid the foundation for shifting to renewable energies, you get p1ss poor economic performance.

Fear not! For the "Green" zealots can still play the COVID/Russia. Russia! RUSSIA!! cards to placate the simps.

COVID fear porn and the Ukraine bread and circus distractions will likely be amplified as the year winds down.

originally posted by: greendust
I suppose you are right, but it does depend on if people can have solid employment.

There is a worker shortage right now by several million, it's an employee's market.

originally posted by: carewemust
a reply to: putnam6

Recession is better than BidenInflation for me.

Seems like the sanctions had being quite a success so far to.
Russia may survive fine i am not sure about the European nations and those that had being trading with Russia.

During the Great Depression, the unemployment rate was VERY high in the USA. Soup lines and no work. The dynamics are not the same so it's difficult to see exactly how this plays out. I'm just glad my house is paid for and I have no debt because that would be one huge worry for me that I simply don't want.

At the height of the Depression in 1933, 24.9% of the total work force or 12,830,000 people were unemployed

I'm investing in cigarettes and whisky/vodka.

originally posted by: AugustusMasonicus

originally posted by: greendust
I suppose you are right, but it does depend on if people can have solid employment.

There is a worker shortage right now by several million, it's an employee's market.

But where did the workers go?
I've seen a bigger increase in blue haired welfare breeders than actual retirements I'm the last few years, and there are jobs available everywhere.

If you get full room and board to not work, and then have to share a room at minimum wage, there's no argument to work.

That makes a worker shortage.

In the great depression, there were bread lines- but not UBI for the lazy masses.

I know a worthless breeder who spends more time high than raising her children, but the state gives her free money for her drugs every month. Soon her oldest child will do the same, because who wants to hire an 18 year old single mother who has no education or experience.
But the government will pay her big bucks to pop out another generation of useless eaters.

originally posted by: lordcomac
But where did the workers go?

They took early retirement or buy out packages if they were not of retirement age.

Oil at $96 right now !!!!

The manufactured "Solution" phase of The Hegelian Dialectic is underway !!

Watch how this ends 🤣🤣🤣🤣

NYC Mayor Adams makes it sound like the sky is falling on his town, thanks to Biden-Harris policies.

"Wall Street is Collapsing"

Source: gettr.com...

originally posted by: carewemust
NYC Mayor Adams makes it sound like the sky is falling on his town, thanks to Biden-Harris policies.

"Wall Street is Collapsing"

Source: gettr.com...

Democrat lower pawns like Mayors are coy with the scripted controlled opposition and fake concern. Everything is going according to plan just the same regardless of who appears to be upset and all riled up 😎