Crude Oil Closes at Lowest Levels In Nearly 2 Years

Crude oil suffered a huge sell-off today, thanks to stubbornly warm weather. I'll get to that in a bit. First, here's a photo of Nigerians scooping up gasoline from a busted pipeline. I found it on this MSNBC photoblog ...
Why are they scooping up gasoline with plastic pails? Because the rising price of fuel has simply put it beyond the reach of desperately poor people like this. So, they punch a nail into a pipeline and grab what they can.

Sadly, a mob of people crouched over gasoline streaming down a gutter inevitably leads to an explosion -- like the one that killed 260 people at the end of December.

Why are are oil and gas prices falling? Because people like the ones in this photo have been priced out of the market all over the third world. Less for them, and more for us. And short-term surpluses give us stories like this one today...

Oil Drops Most Since April 2005 as Mild Weather Curbs U.S. Heating Demand Crude oil in New York plunged the most in 20 months as mild U.S. weather curbed heating demand and traders speculated that fuel supplies increased.

But I believe it's a short-term surplus only. The lower fuel goes, the more the desperate people in the photo will be able to afford it. Huge demand is waiting, priced out of the market ... for now. That is tremendous support for oil prices at lower levels.

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