Oil falls again as IMF cuts forecast; Iran hints at $25 oil
NEW YORK (Reuters) - Oil fell as much as 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.
"Because we have record oil production now, the falling rig numbers are not creating an immediate positive impact in bolstering prices," said Phil Flynn, analyst at Price Futures Group in Chicago. "In fact, they may be creating just the opposite impact; reminding us how poor demand is."The IMF, in its latest World Economic Outlook report, reduced its global economic forecast by 0.3 percentage points for this year and next, projecting a 3.5 percent growth in 2015 and 3.7 percent for 2016.
DYI Comments: For those of you looking for an uncorrelated assets to the general stock market (exampled: Vanguard S&P 500 index fund) here at DYI Vanguard is our top pick for most funds. Vanguard Energy Fund symbol VGENX is a low cost 0.38% expense ratio and well managed. The time is now to dollar cost average building up shares at a low and possibly lower cost. This is why I advocate dollar cost averaging versus lump sum for we don't know when and at what price oil and its oil/gas/services companies will bottom out. Oil at $25? Who knows?! The Iranians have very little power to change the direction of oil as opposed to Saudi Arabia who can swing the price of oil up or down. The Iranians are simply guessing and getting some free press. And don't forget, its ditto for Vanguard's Precious Metals and Mining Fund symbol VGPMX (or your favorite fund) as the mining companies have gone through a severe bear market they are cheaper than physical gold.
DYI
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