I’ve been predicting record oil prices for a number of years now, so when crude oil prices recently plunged from their record highs, I warned investors and consumers that the decline was nothing more than a temporary respite.

But now it’s clear that the fallout from the $700 billion banking bailout pact will virtually guarantee that my prediction will come true.

As the curtain closed on the third quarter yesterday (Tuesday) - leaving many investors worried that the long-feared "Super Crash" was imminent - crude-oil futures were staring at their first decline in seven quarters and their biggest quarterly decline in 17 years, thanks to worries that a slowing economy would curtail global demand. As of early afternoon yesterday, crude oil for November delivery had dropped $39.36 a barrel - or 28% - during the third quarter to close at $100.64 yesterday afternoon.

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In a move that will reverberate from Wall Street to Main Street, the U.S. House of Representatives yesterday (Monday) voted to reject a compromise $700 billion banking-bailout bill, an act of stunning defiance that eradicated $1.2 trillion in shareholder wealth as U.S. stocks endured their biggest one-day point loss in history.

The blue-chip Dow Jones Industrial Average Index plunged 777.68 points, or 6.98%, to close at 10,365.45. The tech-laden Nasdaq Composite Index plummeted 199.61 points, or 9.14%, to close at 1,983.73. And the broader Standard & Poor’s 500 Index plunged 106.59 points, or 8.79%, to finish the day at 1,106.42.

All sectors were gutted, but energy and financials were among the hardest hit, plummeting 11.02% and 10.55%, respectively.

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In one of its wildest and weirdest stretches ever, Wall Street entered a weekend awaiting a government bailout of Lehman Brothers Holdings Inc. (LEH) and exited with Merrill Lynch & Co. Inc. (MER) agreeing to sell itself to Bank of America Corp. (BAC) for nearly $50 billion – and Lehman announcing it will seek bankruptcy in a bid to avoid a total liquidation after it was unable to find a buyer. Read the rest of this entry »

Despite earlier pledges to hold oil output steady, the Organization of Petroleum Exporting Countries (OPEC) yesterday (Wednesday) announced that it would cut production by 520,000 barrels per day in an effort to “strictly comply” with the production quotas set last September. However, Saudi Arabia, the cartel’s largest and most influential member has indicated otherwise.

The cartel, which controls 40% of the world’s oil exports, pointed to such factors as tumbling demand, greater supply, the dollar’s recent rally and an easing of political tensions - all of which have contributed to a 30% drop in oil prices over the past nine weeks. Read the rest of this entry »

Want to know what the price of a barrel of oil will be in eight years?

Exactly $119.50 a barrel.

There’s no shortage of pundits predicting where oil prices are heading. And every day seems to bring new reasons to change the forecast – a resurgent dollar, Americans curtailing their driving habits, oil supply reports… The list goes on.

But the guys who really know the future of oil prices are those sitting right in the driver’s seat – oil producers.

Every day, they make bets about the direction of petro prices on the futures market. And right now, they’re telling you – in no uncertain terms – oil’s got a floor price of $100 a barrel for years to come. Read the rest of this entry »

Now that the Olympic games in China are over, the next major sporting event in the world will be the FIFA World Cup in 2010 to be held here in South Africa. All eyes will be on South Africa, not only in the build up to the event but also after the event. A lot of money and resources are being put into this world show piece event. Some have said, too much money is being spent by the government for an event that will only last one month. A question you hear being banded around a lot these days is, “What will happen after 2010?”

Jason Simpkins from Money Morning takes a look at the China economy during the Olympics games below. Maybe we can see how the Olympics affected China and see if the same will happen in 2010 in South Africa : Read the rest of this entry »

Oil prices have plummeted 24% from the record high levels achieved in July, but the sell-off that sparked a stock-market rally over the last four weeks may not last since the Organization of Petroleum Exporting Countries (OPEC) is already gearing up to cut production.

OPEC, the cartel that controls roughly 40% of the world’s oil supply, pushed its production to the highest level in its 48-year history in July after being criticized for doing too little as the oil bull went on a year-long rampage – causing oil prices to reach an all-time high of $147.27 on July 11.

The production increase was led by Saudi Arabia, which – after a visit from U.S. President George W. Bush – boosted its production from 9.4 million barrels per day (bpd) to 9.7 million bpd, the highest level in 30 years. Higher production from Iran also helped push OPEC’s total output to 32.8 million bpd. Read the rest of this entry »