Don't expect this to be easy but we continue to believe oil is going lower.
From the Canadian Broadcasting Corp:
Brent Crude is below $77 and WTI at $66 as oil prices continue to slide
News that Saudi Arabia expects oil prices to stabilize around $60 US a barrel pushed oil futures lower today.
Brent Crude, the contract traded in most of the world is down 35 cents to $69.57, well below the $70 that some had considered a threshold. Brent has fallen 37 per cent this year.
WTI, the North American contract, fell 80 cents to $66.58 US and Western Canada Select, the price offered for Canadian crude, is now at $50.33. The discount offered for WCS has widened in part because of difficulties getting oil to market.
Dow Jones, quoting unnamed sources, reported Wednesday that Saudi officials believed $60 a barrel was a price they could live with.
The Gulf states “don’t have a price target,” the source said, but “if prices drop further below $60, it won’t be for a long time.”
Oversupply of oil
Saudi Arabia is preparing to slash its January prices in the United States and Asia.
The price of oil is dropping because the U.S. has ramped up production of shale oil and world demand for oil is waning as emerging economies begin to cool and Europe’s fuel use flattens.
When Saudi Arabia, the de facto leader of OPEC, trimmed its prices to $71 last month, markets believed $70 a barrel might be the base price for oil.
But at a meeting last week, OPEC decided not to pull back on production and oil prices began falling again. Brent Crude has fallen 10 per cent in the past week.
Venezuela, which is reliant on oil revenues, had urged a deep cut in oil output at the OPEC meeting, but Russia, which is not part of the oil cartel, indicated it would not participate in a general supply cut....MORE
