The real reason oil is dropping, and a boom in the U.S. is coming:

[Mr. Now]

The likelyhood is a economic boom in the US may be nil over the next 18 months due to the need to work through the real estate/interest rate distortions.

Do you really see a boom in the USA in the near term, as measured by GDP?

[Groty]

Oil inventories are currently the highest they've been since 1999. Storage capacity is starting to become scarce. That scarcity is increasing the cost of storage. So, the cost to carry excess inventory is increasing. In addition, GDP decline from 5.6% in 1Q to 2.9% in 2Q.

Maybe oil is $12 off its high in response to increased carrying costs and a reduction in demand created by a slowing economy.

[Groty]

[ QUOTE ]
Oil inventories are currently the highest they've been since 1999. Storage capacity is starting to become scarce. That scarcity is increasing the cost of storage. So, the cost to carry excess inventory is increasing. In addition, GDP decline from 5.6% in 1Q to 2.9% in 2Q.

Maybe oil is $12 off its high in response to increased carrying costs, a reduction in demand created by a slowing economy and EXCESS SUPPLY.

[/ QUOTE ]

[kvkwn]

The drop in oil price is one of the factor which caused the stocks to rally last week.

But I do not believe the crude oil price will drop to anywhere below $50 for the next 12 months.

I anticipate oil price will still rise gradually, albeit at a slower pace.

Lower oil price is one of the bullish factor for stocks, but not the sole factor.

For a sustainable stock rally, the Fed needs to cut the interest rates.

Lower interest rate will encourage consumer spending, ease the corporate debt and enhance GDP growth. It will also help the home buyers and save the speculators.

I believe the Fed will cut the rates if he sees the GDP number falls to 2% or below.

If it happens, then a bull market will follow.

[Baulucky]

This land was off limits to drilling till last year.