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Heavy-Handed Politics

"€œGod willing, with the force of God behind it, we shall soon experience a world
without the United States and Zionism."€ -- Iran President Ahmadi-Nejad

Sunday, October 01, 2006

Oh no. Oil is getting too cheap?

For once, the worry is that oil may be getting a little too cheap

But analysts are divided as to why - and what might happen next.

Sunday October 1, 2006
The Observer

"Nothing spooks the markets like the oil price. The fear of running out, the threat of terrorism, panic over US house prices, all of these are built into that most volatile of sums: the price of a barrel. Now, after years of fretting over rising prices, traders and economists are finding reasons to shiver over its fall, and what it tells us about the global economy.

So last week, instead of worrying about confrontation between the US and Iran - concern that helped drive oil to a $78 August peak - the fears were of a nasty US slowdown, thanks in part to a crumpling housing market, that will undercut demand for crude. The price fell to $60, a six-month low.

Is that fall here to stay, and is it really a harbinger of economic doom? It depends whether what has happened in recent weeks is driven more by real changes or by the feverish speculation of traders."


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