oil prices dropping again.

Oil prices dropping again.

Rachael Morgan 11-21-08

Just six months ago oil prices by the barrel broke records by hitting an all time high of $145 a barrel. Records are still being broken today but in a different way, oil prices have now hit their all time low of fifty dollars a barrel, or to be exact $49.62.
In September Goldman Sachs Group Inc “recommended a three-way trade of options on March crude futures, which effectively bet that the contract would trade between $120 and $140 a barrel. That trade currently posts a loss of $23.99 a barrel, and the bank now expects oil prices to remain below $65 a barrel in March.”
With such a huge decline in oil prices, although they have been helpful at the pump, will be extremely dangerous for our already declining economy. If the prices keep falling our dependency on foreign oil will continue to rise as our own oil production companies are forest to slow production.
Goldman Sachs Group “continues to expect a rally in the second half of 2009, with prices ending the year at $107 a barrel. The bank leads one camp that expects a new period of tight supplies and rising prices once economies begin to recover, albeit less than the runaway market seen earlier this year.”
In the months to come the only way to tell if these reports will hold any truth, is to wait and see. Unless the demand goes up there will be no change, and our economy will continue to suffer.

Sources cited http://online.wsj.com/article/SB122719508911344363.html?mod=googlenews_wsj