OPEC is now about as scary as the sheriff in Blazing Saddles threatening to shoot himself. After announcing their much-anticipated production cut today, the price of a barrel oil is tanking, dropping about 8%, and briefly falling below $40. Either people think the cuts will be irrelevant, or that the cartel members have no hope of sticking to them.
What makes this move even more amazing is that the dollar is getting slapped about today. Oil is quoted in dollars, and is sometimes seen as a hedge, but now it’s just falling. Even running the Fed printing presses isn’t helping the dirty stuff. Gold, a currency hedge with a more devoted followin, is rising today. Oil bugs still believe that over the long term Peak Oil and insatiable demand will send oil back soaring, but for now, it looks pretty dead.
Charts like this, via Environmental Economics, only appeal to the most callused falling-knife catchers. And this chart is already a couple days old.