Oil Heading To $20 bbl BUT Pump Prices To Double

Who could be correct........?

A strengthening dollar and economic weakness in Europe and China could drive crude prices as low as $20 per barrel, according to Raoul Pal of The Global Macro Investor newsletter.

The dollar has been climbing recently against the euro and the yen, pushing oil prices lower and sending fear across the markets. He said crude could still fall another 60 percent before the downturn is done.

Pal said the strengthening dollar is a big part of why oil could continue to drop. "If we look back historically at how these big dollar bull markets go, I think it's going to go, using the ( dollar index ), at least to 125, maybe even further," he said in an interview Tuesday on CNBC's " Fast Money ."

Historically the price of oil moves inversely to the strength of the dollar.


Oil heading to $20: Expert

A former top oil executive says the price of gas at the pump could double by the end of the year.

In an interview with CNBC, former Shell Oil President John Hofmeister predicts that U.S. oil could skyrocket from the current levels under $48 a barrel to $80 by this fall, just as consumers are getting used to the windfall from lower gas prices. That would force gas prices to double, from the current $2 to a whopping $4 by next winter.

The reason, he says, is the oil companies are masters of the simple economics of supply and demand.

"The industry is the best in the world at cutting costs when they have to reduce spending. What's happening is we're shutting down drilling rigs," Hofmeister said. "Not completing the wells that have just been drilled. And we're going to eat off the surplus oil out there probably by mid-year."


Here today, up tomorrow: Why gas prices may be on the rise
They just dropped.

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