$200 Oil: World Economy Would Collapse

World Economy Would Collapse If Oil Hit $200, Deutsche Says: “The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany's largest bank.” Ummmmm. Duh! Personally, I think oil has exceeded $100 a barrel for so long now that you can safely swap ‘would’ for ‘is’… and forget about waiting for $200 oil. That isn’t going to happen, absent some kind of geopolitical debacle...

Oil Declines After Supplies Rise for First Time in Six Weeks: “Crude oil fell more than 2 percent after a U.S. government report showed that inventories rose for the first time in six weeks.

Inventories gained 803,000 barrels to 301.8 million last week, the Energy Department said. A 1.1 million-barrel drop was forecast by analysts in a Bloomberg News survey. Fuel demand averaged 20.2 million barrels a day in the past four weeks, down 2.3 percent from a year earlier, the report showed.”

The most important development is that fuel demand has dropped 2.3%. Higher prices are working… so are crashing housing prices, and the bursting of the credit bubble.

“U.S. gasoline purchases fell for a ninth straight week as record prices crimped demand, a MasterCard Inc. report showed yesterday. Consumers purchased an average 9.45 million barrels of gasoline a day in the week ended June 20, down from 9.71 million a year earlier, MasterCard, the second-biggest credit-card company, said in its weekly SpendingPulse report.”

Now factor in some serious subsidy cuts abroad as explained in Oil Drops on Subsidy Cuts in China, India, Malaysia, Taiwan and pretty soon parabolic oil will be thing of the past.