Crude oil is now trading below $117 despite the damage to Turkey's oil pipeline. As the Dollar continues to gain strength, crude oil keeps plunging lower and lower. Crude oil has now fallen more than 20% and is in bear market territory.With the plunge in crude oil prices, all those ships off the coast of Iran that contain crude oil in storage may become a bust instead of a boom for the world's 4th largest producer nation. About 3-4 months ago, John Mauldin predicted this possibility in his weekly newsletter. He said that when the price of crude oil started to drop, the owners of all that crude would be in a rush to head to port to unload crude oil as quickly as they could. He said this could cause a glut of crude oil as they all tried to dump crude oil at the same time.
What welcome relief at the pump! But let's not become too giddy. The fundamental problem of depleting global oil reserves hasn't changed, so eventually, crude oil demand and supply will reach equilibrium again, and higher crude oil prices are likely to eventually resume. Still, I think I'll take a drive this weekend to celebrate!
