Traders Bet on $30 Crude Oil as OPEC Plans Talks on Output Cut , page 1

posted on Nov, 13 2008 @ 02:49 PM

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Traders Bet on $30 Crude Oil as OPEC Plans Talks on Output Cut

By Margot Habiby

Nov. 13 (Bloomberg) -- Oil traders made their biggest bet yet that the Organization of Petroleum Exporting Countries will fail to prevent crude prices from plunging below $30 a barrel.

Trades in crude-oil options contracts that would allow the holder to sell oil for February delivery at $30 a barrel reached 1,406 on the New York Mercantile Exchange today, making the contract the day's second-most active, exchange data show.

OPEC, the supplier of about 40 percent of the world's oil, plans to meet Nov. 29 in Cairo to discuss another output cut after crude oil fell to $54.67 a barrel, a 21-month low, earlier today. The 13-member organization cut production by 1.5 million barrels a day at a meeting in Vienna last month.

``Somebody is buying a little bit of insurance with a very deep out-of-the-money put option,'' said Tim Evans, an energy analyst with Citi Futures Perspective in New York. ``It's very exciting to think about $30 oil, but are we going there? Most likely not.''

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Sounds like more manipulation and games played with the markets.

Would $30 oil be good for the overall global economy anyway?

[edit on 13-11-2008 by MOFreemason]

BlueTriangle

posted on Nov, 13 2008 @ 02:52 PM

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Originally posted by MOFreemason
Would $30 oil be good for the overall global economy anyway?

I think $30 oil would be good for everybody except the major oil producing countries. This would probably translate to somewhere in the area of $1 a gallon gas. I don't know about you, but when my gas budget goes down to 1/4th of what it was just a few months ago I certainly have a few extra $$ to throw into the economy.

MOFreemason

posted on Nov, 13 2008 @ 02:54 PM

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reply to post by BlueTriangle

This would TOTALLY benefit my family budget without a doubt.

Globally, I wasn't sure what impact it has on the oil-bearing nations and their respective economies.

Would it amount to a trade-off in American consumers purchasing more with their capital and the oil-nations cutting back? Or, does this only add more fuel to the global economic collapse?