Crude oil really is trading below $40

The February 2009 crude oil futures contract closed at $39.91, with today being its first day of trading as the front month contract. The January contract closed at $33.87 on Friday, the February contract at $42.36.

Although declining demand is now a reality, the actual demand declines have been quite modest, especially compared to the price declines since the July 11, 2008 bubble peak which was driven mostly by wild speculation and momentum trading rather than actual demand which probably peaked last spring.

-- Jack Krupansky