Report from CNBC. Oil falls below $121/barrel. OPEC president (Algeria's oil minister) says oil to $70 to $80 in long term. It appears prices could be headed in the same direction as what Lindsay Williams was saying...the question is will the outcome from the price drop and the reason for the price drop match up with what he said.
http://www.cnbc.com/id/25891303
Oil Prices Sink to $121 On Signs of Weak Demand
OIL, OIL PRICES, ENERGY, CRUDE, INVENTORIES, GASOLINE, ENERGY PRICES, EIA, OPEC, DEMAND, IRAN, NIGERIA, CHINA, RUSSIA
By ReutersReuters
| 29 Jul 2008 | 10:59 AM ET
Oil fell more than $3 a barrel toward $121, touching the lowest price since mid-May, as signs of weakening demand outweighed a disruption to Nigerian oil output.
The drop also coincided with a firmer U.S. dollar, which may have reduced the appeal of commodities to some investors, and
comments from OPEC's president that oil could fall to $70 or $80 in the long term.
"We still believe that crude's rallies are vulnerable and we would advise not buying into them," said Edward Meir, analyst at MF Global who earlier on Tuesday said he expected an "eventual retreat" to $121-$122.
U.S. light sweet crude was down and traded as low as $121.10, the lowest since May 15.
London Brent crude was also off.
The president of OPEC, Chakib Khelil, on Tuesday called the current price "abnormal" and said he did not think the producer group should consider cutting output should prices continue to fall as markets were now balanced.
Khelil, who is also Algeria's oil minister, said oil could fall to $70 to $80 in the long term, if the U.S. dollar continued to strengthen and geopolitical concerns eased.
Oil has fallen from a record peak of $147.27 on July 11, pressured by signs that high prices and an economic slowdown are curbing demand especially in the United States, the world's largest oil consumer.
The chief executive of BP Plc Tony Hayward said on Tuesday he saw demand destruction of 5 to 10 percent for gasoline in developed OECD economies, as people drive less due to high fuel prices.
The Energy Information Administration said on Monday U.S. oil demand in May was 660,000 barrels per day less than previously thought.
A separate government report said motorists were driving less.
Limiting oil's drop, Shell declared force majeure on Tuesday on its Nigerian Bonny Light oil exports for July to September following Monday's attack by militants on an oil pipeline in the Niger Delta.
Tension over Iran's nuclear programme also provided support. Iran is the second-largest producer in the Organization of the Petroleum Exporting Countries.
Attention on Wednesday will focus on the latest snapshot of U.S. oil supplies. Crude oil stocks probably fell by 1.4 million barrels and gasoline dropped by 100,000 barrels, analysts said in a Reuters poll.
Distillates inventories are expected to rise by 1.7 million barrels.
