According to Yahoo! Finance, crude prices tumble to their lowest levels in almost a year - below $78 a barrel Tuesday in Asia amid a global sell-off of equities and commodities triggered by fearful investor.
Benchmark oil for September delivery was down $3.48 to $77.83 a barrel, the lowest it’s been since September 2010.
"It's clear we're entering, or are on the precipice of, another global financial crisis," said Richard Soultanian, an analyst with NUS Consulting, who expects crude to fall to between $55 and $60 before rebounding to the mid-$70s in the fourth quarter of 2011.
Even if the prices at the pup take a sudden dive right now, US consumers might be inclined to spend less, especially seeing as payrolls will be a concern.
The historic downgrade of US debt below the AAA ration to AA+ has triggered renewed concerns and panic selling on the stock market. Both Dow Jones and the S&P have fallen below the level they started the year with, while the Transportation Average that covers the twenty most important companies in the transportation industry fell 7 percent yesterday, finishing 14.55 down for the year.
"The way prices are falling, especially on stock exchanges, they are likely to keep falling until the Fed unveils some new program," energy consultant Cameron Hanover said in a report. "There are very few options available, but this is threatening to be a complete meltdown."
So we’re waiting for the government to step in, but isn’t that the problem to begin with - governments across the world borrowing money to fight off little recessions over the past 20 years or so?
In the mean time, a debt downgrade will surely mean the cost of borrowing will increase for the US, which could trickle down to the end consumer who wants to.... buy a car on credit for instance.
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