Oil prices flirted with five-year lows Thursday as unemployment benefit claims rose and OPEC cut demand expectations for 2009.
Any belief that energy prices had bottomed out were wiped away early in the day as crude plumbed new depths for the year and more government data suggested the economy may be worsening.
"The bull oil era is officially over," said Phil Flynn, an analyst at Alaron Trading Corp.
Light, sweet crude for February delivery fell 5 percent, or $1.88, to settle at $35.40 a barrel Thursday on the New York Mercantile Exchange. Prices fell as low as $33.20 Thursday and only gave up steep losses when the Dow Jones industrial average rebounded.
And lots of oil importing countries will benefit, including lots of poor countries.
It is unfortunate that worldwide economic problems have caused the decline in oil prices, but don't doubt that this will hurt Iran, Venezuela, and Russia.
Iran will have opportunities to skim money from this sweet gig with the sainted international community:
To chair the 2009 governing board of the U.N.'s flagship agency, the multibillion-dollar globe-girdling United Nations Development Program, dedicated to promoting good governance and ending poverty, the U.N. has now picked--wait for it--the Islamic Republic of Iran.
Ah, the United Nations. If Iran doesn't manage to pick the pockets of UNDP, I'll be shocked.
Venezuela is hoping private companies have short memories:
Squeezed by slumping crude prices, Venezuela is reaching out to the multinational oil companies it once demonized as imperialist profiteers.
Venezuela is soliciting bids from the world's major oil companies to extract heavy crude from vast deposits in its Orinoco River region. Despite President Hugo Chavez's criticism of U.S.-style capitalism, it has become clear that state-owned Petroleos de Venezuela SA needs both the cash and expertise of Big Oil.
These international oil companies have made windfall profits in recent years, but analysts doubt many will want to invest again given Chavez's history of seizing foreign stakes in Venezuela's oil.
Good luck with that plan, Hugo.
Russia, meanwhile, seems to figure that as long as energy prices are reducing income, why not try to intimidate Europe into passivity?
New efforts to break the deadlock between Russia and Ukraine and restore gas supplies to freezing European countries were planned on Friday, with the intervention in the dispute of a consortium of energy firms.
How much more is Russia losing with no sales as opposed to low-price sales?
So far, it looks like only Venezuela has little to look forward to in a depressed oil environment.
