Previous floor for oil was $60. I thought the new floor of $80 would hold (I was wrong).
Oil tied to value of dollar.
Free fall to $60 suggests a) the Euro is in much deeper trouble than anyone yet realizes; b) economy, especially in Europe, and probably US, is in much worse shape than people willing to admit; and, c) another buying opportunity.
I don't think Canadian oil sands are viable under $60/bbl of oil. The Bakken is viable down to $40 but I think we will see production even in the Bakken slowed if oil goes to $60/bbl.
Oil stored in Cushing, OK. I wonder if it's time for oil storage units in North Dakota? Any purpose for additional storage units? Probably not. But that's something NDIC/Bismarck legislators/Bank of North Dakota ought to think about. After all, the grain co-ops seemed to have worked nicely over the years.
Bottom line: some folks might be seeing some great opportunities with the pullback.
Update: shortly after posting the above, White House Paul Volcker said about the same thing. The beginning of the demise of the Euro? Will Germany be the first to opt out?
