Crude Oil Prices Test 3-Week Lows as US-China Trade Deal Looms
Crude Oil Prices Test 3-Week Lows as US-China Trade Deal Looms; (Oct. 3) Yet another indication that the end of the world may be near is in the United States where the price of a barrel of oil has fallen to near record lows and is now within striking distance of that price that prevailed at the very beginning of the ‘recent’ discount.
To wit, several analysts believe that the US has now entered into a new phase of the world economic slowdown and that the US recession is well into its fourth year. And those US dollar rumors that have been the staple of economic reports for years now are beginning to decline even as there is another fact we must address that is: the US dollar, being under tremendous stress, is bound to suffer at some point.
Not to mention, the world economic slowdown is now so severe and so widespread that perhaps the danger is no longer confined to the poor countries in the Middle East. One could add the US to that list of nations that are suffering.
The downtrend in the prices of crude oil has been visible ever since Saudi Arabia cut off its shipments of the petroleum that had been exported by the OPEC countries and forced other nations to significantly reduce their purchases. The major countries – Iran, Iraq, Libya, Yemen, Algeria, Nigeria, Egypt, and Venezuela – have been buying just a small percentage of what the Saudis had been importing.
And yet, even with those countries now cutting back, one could point out that the US is still facing big market fluctuations that have been reverberating around the world for quite some time. US-China trade deal could be one that triggers another major downturn in the world’s economy.
Such a world would also explain the many bearish indicators that have been released by analysts on the big world financial markets. The post- Fed QE program seems to be the only big one that has not produced a greater number of bearish indicators.
Bearish indicators however are really the devil’s strategy to produce a selling surge in the major stock market indexes that would normally benefit the owners of the stocks. That is why one must pay attention to them.
What has to be made very clear is that at some point the world will suffer a long-term recession. A major depression is what will ensue and that means that the world’s economy is doomed to suffer an immensely difficult time in the future.
That has been a most unpleasant point to watch because of the continuous downtrend in the oil prices over the last two years. The evidence is that the coming boom will likely be a huge selloff on a global scale.
The problem is that it is just too early to tell whether the world’s oil prices will increase by almost any amount or decrease by a considerable amount. But to the extent that the prices do rise, the oil nations will also face serious problems.
And the fact is that many investors do not really know when to start selling off oil stocks. That is why the main problems will be severe in oil and other energy-related stocks.