How Low Can Oil Go?

OIL HITS $50 - Oil Price Drops to 5 Year Low. How Low Can Oil Go?





As the price of oil drops below $50 for the first time since 2009, noted investor Jeffrey Gundlach warns that a fall to $40 dollars a barrel could spark “terrifying” geopolitical consequences.

The February contract for West Texas Intermediate briefly fell to a session low of $49.95 earlier today, while Brent crude also hit a 5-½-year low.

However, according to influential investor Gundlach, founder of Doubleline Capital, a fall to $40 could set in motion devastating global developments. “Oil is incredibly important right now,” Gundlach said in a recent interview with FuW. “If oil falls to around $40 a barrel then I think the yield on ten year treasury note is going to 1%. I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying.”

As Zero Hedge points out, Gundlach is right to draw a correlation between unstable price fluctuations in crude oil and geopolitical turmoil.

“Large and rapid rises and falls in the price of crude oil have correlated oddly strongly with major geopolitical and economic crisis across the globe. Whether driven by problems for oil exporters or oil importers, the ‘difference this time’ is that, thanks to central bank largesse, money flows faster than ever and everything is more tightly coupled with that flow.”

The last time we saw anything like this activity in terms of oil price, it turned out to be a precursor to the global financial collapse of 2008.

“A junk bond implosion is usually a signal that a major stock market crash is on the way. energy junk bonds. If they begin to collapse, that is a sign that all hell is about to break loose on Wall Street,”

engineered attack on the Russian economy and the Ruble which is being led by Saudi Arabia and the Obama White House. The ultimate goal is to destabilize the Russian government and foment a color revolution.

“The U.S. and European sanctions against Russia will become more severe and crippling in the face of drastically falling oil prices – prices which are falling drastically because of the unprecedented boom of shale gas fracking both domestically in the U.S. and abroad in Ukraine and other locales,” writes Mac Slavo. “The oil & gas giants like Chevron and Exxon Mobil have created revolutionary conditions with now direct consequences on U.S. foreign policy and global war for dominance.” Oil may be at $50 a barrel today, but don’t expect that to last. oil "crude oil" "oil trading" "oil price" price trading "stock market" "dow jones" nazdaq london nyc S&P500 collapse economy u.s. usa america "united states" consumer gas "gas price" car driving energy "clean energy" drop impact money cash usd dollar currency "saudi arabia" russia news media entertainment market global company gold silver commodity bubble "sell gold" 2015 humanity politics elite texas europe "elite nwo agenda" federal reserve trillion dollars interest rates oil futures alex jones infowars gerald celente david icke lindsey williams glenn beck anonymous debt fiat currency jsnip4 rawdogletard qe unlimted jim rogers marc faber montagraph

According to industry insider and long-time investor Henry Aldorf, one small hiccup on the geo-political scene could send the price right back to where it was before, if not higher. With Vladimir Putin now appearing to be trapped as his economy and currency collapse, Aldorf says we really can’t predict what he may do. Moreover, the global surplus in oil is just a million or two barrels out of a total of about 90 million barrels consumed daily. With many companies now being forced to close their operations because of costs and even some of the world’s larger producers looking at pausing projects, a supply crunch may be on the horizon in the very near future.

The fall out, of course, will be higher prices for everyone. Gundlach: Oil is incredibly important right now. If oil falls to around $40 a barrel then I think the yield on ten year treasury note is going to 1%. I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying. Iraq's oil exports were at their highest since 1980 Who is to blame for the staggering collapse of the price of oil? Is it the Saudis? Is it the United States? Are Saudi Arabia and the U.S. government working together to hurt Russia? And if this oil war continues, how far will the price of oil end up falling in 2015?

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