"The king believes that the current oil prices are abnormally high, and he is ready to restore prices to their appropriate levels," So, I guess on Monday oil prices will be $40-$60 dollars a barrel.
oil goes from 40 to 140 its over 350 % rise in oil and now a 5 to 10 % drop in oil is considered game over for oil.. hahaha... till 4th july no way oil is gonna crash hard.
Basically, they will increase supply and this will cause prices to fall. Its going to be a good test to see how the market reacts. If prices make a sharp move down.. it might get exaggerated because a lot of stop losses might get hit. Everyone is long OIL>
I'm sure the market will collapse just like it did following Bush's token 300k increase! The 500k has been circulating in the news all week anyway. Here's some cannon fodder for the bulls: http://www.bloomberg.com/apps/news?pid=20601087&sid=aWwoUcZaR5BY&refer=home
500,000 barrels isn't enough. We need 3mbpd to restore equilibrium. this is a game, a big game. Here's how to bring down oil prices: 1) Lift ANWR and offshore restrictions domestically 2) Release oil from SPR during oil price spikes 3) Institute an agreement with other world governments to regulate oil trading to take it out of the hands of speculators (margin requirements, etc)
Saudis pumping more oil, strong dollar, eliminate china/india subsidies... these factors will pressure oil in the next few months. Also US consumption on its way down a bit too.
The Financial Times reports (Fri June 13 2008) that the role of speculators is cast in doubt by increased refinery oil premiums for high quality crude and that this lends weight to the argument that speculators are not the cause of current high prices. This is no surprise to me or other serious people who actually know something about the oil market. There are uninformed clowns setting up anti-speculation threads at ET and talking gibberish to chime in with the displeasure of the populace at large who don't like paying higher gasoline prices at the pump. No one does. But it is still not a reason to lose your mind and fail to understand that the oil futures price represents a tight physical market. This new Saudi proposal is about increased production. Arguably there is also currently insufficent refinery capacity to refine more sour or heavy crudes.
From what I see the party won't be over until the speculators agree on another avenue (maybe they already have). What ever it is you can discount any commodity that's already risen far enough to cause political and social tensions and also those which don't have a large enough market to sustain a multi-year bull run with billions invested. It could be anything from antiques or art to cattle or cotton. Who knows but the speculators will move on, eventually, like the greedy parasitical bastards they are.