Russia ends Georgia operation,

A head on fight between unequals seldom lasts for long. Now there does not seem to be any obstacle for the crude to correct further. How far will it correct?

As far as crude consumption is concerned, the world can be divided into US and the non-US.
The current correction is due to major demand destruction in the US. There may have been some demand rise in other countries since last year. But the output has also been raised. If i am not wrong, the Saudis are pumping in about one milllion BBD extra than last year. This together with the fact that India China and several other countries have raised petrol prices will take care of the demand rise in non-US. So does that mean that the overall current demand for crude is more or less the same as one year ago? or at least we are approaching there. One year ago, the price of crude was around $75. So will that mean crude will correct to below $80? That would seem a bit too much, at for it to stabilise below $80, because too much of crude correction will again increase demand. I am clueless, however. I have started reading about crude (and in fact the stock market itself) only after Feb 2008. But certainly it looks like crude is heading below $100 before it stabilises. All this is assuming ofcourse Israel is currently incapable of attacking Iran.

Aug 12, 2008

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