NYMEX crude oil falls for the third day to below $72 on recession concern

Crude oil fell for a third day as plunging global stocks heightened concern bank bailouts won't prevent a recession. NYMEX crude oil for Nov 2008 delivery fell below $72 to $71.21, the lowest since 29 Aug 2007. Prices have dropped 51% from the record $147.27 reached on July 11. OPEC cut its 2009 demand forecast by 450,000 barrels a day to 87.21 million barrels a day because of "dramatically worsening" financial market conditions. Net-long positions by hedge funds and other large speculators fell by 36,403 contracts, or 91%, from a week earlier.

- At half the price of the record $147.27 hit earlier, we should be expecting SPR's all over the world to be filled to the brim, and inventory levels everywhere to be at the highest levels ever. There should be so little demand that half the refineries should be shut down, half of all the cars and trucks should be completely off the roads, and half of all the factories should be idle.

Actually, we should only have half the people around, with half the tractors idle in the fields, and half the truck fleet in service. If not, then things have gotten as completely crazy to the downside as it had been completely crazy to the upside. So let's split it down the middle, and we could suppose that the real price probably lies somewhere in between $70 and $140. We'll see.

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