Submitted by Gail Tverberg via Our Finite World blog,
A person often reads that low oil prices–for example, $30 per barrel oil prices–will stimulate the economy, and the economy will soon bounce back. What is wrong with this story? A lot of things, as I see it:
1. Oil producers can’t really produce oil for $30 per barrel.
With December's seasonal shenanigans out of the way, and following 2 record-breaking weekly builds in gasoline stocks, with expectations of a 2.3mm barrel build API reported a large 4.6mm inventory build (double expectations) . Cushing inventories built 63k, rising for the 12th week in a row. Gasoline stocks rose once again (+4.7mm) and Distillates also (+1.5mm).
December is over...
Following crude's v-shaped recovery today, API's huge build sent WTI back lower...
Charts: Bloomberg
Bob Pisani nailed it today "I'm agnostic about whether to buy or sell today... but I'm not selling"...
Neverthelesss, the World entered a bear market today...
Couldn't have happened to a nicer guy?
Source: Investors.com
Two months ago, long before the WSJ and the NYT wrote nearly identical pieces, we laid out a list of China risk factors which everyone by now is familiar with. These were as follows: