That's right, once again tumbling oil prices are taking down the global markets as yesterday's little meeting between OPEC and the American Oil Cartel (the one they pretend doesn't exist) in Houston broke up without an agreement to even cap production, let alone cut it back. Aside from telling CNBC only Allah sets oil prices, Ali Al-Naimi said to his North American counterparts:
“If other producers want to limit or agree to a freeze in terms of additional production, that may have an impact on the market, but Saudi Arabia is not prepared to cut production."
Venezuela was hoping for a lifeline and got none and that country may end up cutting a huge amount of oil production as its economy collapses, giving Al-Naimi exactly what he wants – involuntary cutbacks by bankrupt oil companies. Brazil is also in a lot of trouble as are many individual producers in Canada, the US and Mexico and now so are many hedge funds and foolishly bullish oil traders, who ramped up the price of oil from $29 to $34 (17%) into this meeting, only to see their hopes and dreams smashed into ashes at yesterday's meeting.
It's sad because, just last Wednesday, I told Canada that oil prices (and the industry) were NOT going to make a strong comeback and that they needed to move on and put their money to better use in other industries (see my Business News Network interview here). I further detailed my veiws on Oil, Gasoline and Natural Gas in yesterday's Live Member Chat Room.
I also said that what were seeing in the markets is an overall rotation out of the Energy Sector (and the Financial who foolishly lent them money) and that continues to be what we're seeing dragging the markets down all year:
Conglomerates are down there too but that's a funny category that includes "diversified" business that often include Financial and Material components (like GE, SI, DD). The problem these sectors have is that the…