Brent crude traded as low as $104, down from closer to $120 just three months ago. The drop should continue based on data about the faltering economies of India and Brazil. Most analysts claim US stockpiles are at multi-year highs. And, OPEC says that its production is close to maximum capacity. The fall in Brent means that its May drop will be the sharpest in two years.
The sell-off has started to look like the one in the second half of 2008 after crude reached an all-time top just above $140. The blooming recession pulled crude prices down, and kept them down for over two years. The new recession which has started to grip Europe is not nearly as bad as the one in 2008, but there are more and more forecasts that Europe will pull the US economy at least partially under and add to the deceleration of emerging country growth
Douglas A. McIntyre