No less of a stampede on the way down
Reuters reports that oil’s crash continues:
U.S. light crude settled down $4.82 to $115.20 a barrel, before falling to $114.90 in post-settlement trade, the lowest level since early May. Prices have slid since hitting a record high over $147 a barrel on July 11. London Brent crude settled at $113.33, down $4.53.
Apparently that fellow who said that oil’s chart reminded him of 1987 wasn’t too far off the mark. Meanwhile, remember what Cramer said a few months ago:
these moves speak to something so fundamental as to be outrageously obvious: Oil is not going back to $70, where ag plantings might be unclear and nat gas might be just a bit better than oil. It is not going back to $80, where it made good economic sense to get more fertilizer or drill for more natural gas. It may not even go back to $90, where food for oil is outrageously profitable and natural gas is a shoo-in. A retreat to $100 seems hard now. As someone who has been saying that oil is headed to $125 — been my thought now for two years — I have to say that these prices for these ag and nat gas companies are NOT TOO HIGH to pay.
Here’s what he says now:
Someone asked me how long oil can go down earlier today. I said that I didn’t think it could stop until it went down as much as natural gas did. That means it could go to $90.
It was only a year ago, when oil was $70 a barrel, that people wondered whether it could ever get to $80. It was only a few weeks ago that people speculated that oil would never go down from $145 a barrel. People generally (and particularly the so-called experts?) often predict that tomorrow will be just like today. The trend is your friend — until suddenly it isn’t. Man’s track record in predicting major discontinuities is pretty bad.