Current Oil Price

Bandidoz · Post by **Bandidoz** » 12 Dec 2008, 19:30

Well he didn't exactly say "new all time low", did he? The context is pretty bloody obvious.

Is context-free discussion a sign of senility?

Andy Hunt · Post by **Andy Hunt** » 12 Dec 2008, 20:20

Getting a rise out of a low seems to be what RGR is all about.

Aurora · Post by **Aurora** » 15 Dec 2008, 17:16

BBC News - 15/12/08

Oil prices have risen sharply, briefly topping $50 a barrel, ahead of Wednesday's meeting of the oil producers' cartel Opec.

Some members are keen to cut production by two million barrels per day to boost prices, which have slumped from a peak of $147 a barrel in July.

Opec is meeting in Oran in Algeria, having delayed a decision at an informal meeting earlier in December.

US light, sweet crude for January delivery rose $3.19 to trade at $49.47.

The price had earlier peaked at $50.05 a barrel.

Opec's biggest previous cut in production was in April 1999 when it cut production by 1,716,000 barrels per day (bpd).

'Sizeable reduction'

The cartel cut 1.5 million bpd at its last formal meeting in Vienna, Austria in October, but prices continued falling regardless, and hit a four-year-low of $40.50 a barrel on 5 December.

Prices are being depressed by falling demand for oil as the world's major economies slow and some of them go into recession.

"We have to act - we see a very sizeable reduction," Opec secretary-general Abdullah al-Badri told reporters.

Two million barrels represents about 5% of Opec production.

"Everybody is supporting a cut - I don't have any doubt about it," said Opec president Chakib Khelil.

Mr Khelil also confirmed that Opec's biggest exporter, Saudi Arabia, had already cut its own production by 8% in anticipation of the cartel's decision.

Original Article

What a bunch of shiites!

Ben · Post by **Ben** » 15 Dec 2008, 17:36

Let's assume that OPEC manage to achieve a cut in oil production and this results in a rise in the oil price; wouldn't this merely push economies worldwide deeper into recession, resulting in lower demand for oil, thereby driving the oil price back downwards?

Totally_Baffled · Post by **Totally_Baffled** » 15 Dec 2008, 18:14

Ben wrote:Let's assume that OPEC manage to achieve a cut in oil production and this results in a rise in the oil price; wouldn't this merely push economies worldwide deeper into recession, resulting in lower demand for oil, thereby driving the oil price back downwards?

http://www.bloomberg.com/apps/news?pid= ... ty_futures

Crude Oil Falls on Concern OPEC Cuts Will Be Insufficient

Dec. 15 (Bloomberg) -- Crude oil fell, retreating from $50 a barrel in New York, on speculation that OPEC production cuts may be insufficient to bolster prices as the global recession curbs fuel consumption.

Looks like the market thinks that even major production cuts cannot keep up with the fall in demand. Back down to $45 already.

So by January looks like the world already has circa 3.0 million barrels per day of spare capacity and the recession hasnt got going yet.

Looks like it will be around 4 to 6 million by the end of next year if the global economy contracts!

Incredible how quickly things change...

biffvernon · Post by **biffvernon** » 15 Dec 2008, 18:23

I suppose that if OPEC were to cut sufficiently to cause the prise to rise this would still not provide an incentive for investment in new production, since profiability would be dependant on OPEC.

Totally_Baffled · Post by **Totally_Baffled** » 15 Dec 2008, 19:32

biffvernon wrote:I suppose that if OPEC were to cut sufficiently to cause the prise to rise this would still not provide an incentive for investment in new production, since profiability would be dependant on OPEC.

These is a weird one.

If oil prices are too low for future investment, the inevitable effect on supply kicks in, and then prices rise so those investments become justified.

Surely thats how its always worked?

If oil was still $1 a barrel, then I am sure the North Sea would still be untouched along with Cantarell, the GOM etc and all those other expensive places!

biffvernon · Post by **biffvernon** » 15 Dec 2008, 20:56

Yes, but say I've got zillion dollars to invest in oil drilling, before I spend it at the North Pole or wherever I'd look at the price of oil to see if I might expect a good return. If the price is where it is because there is a real geologically inspired shortage I might invest but if the price is fixed by Saudi turning the tap off I'd be very cautious.

Totally_Baffled · Post by **Totally_Baffled** » 15 Dec 2008, 21:21

biffvernon wrote:Yes, but say I've got zillion dollars to invest in oil drilling, before I spend it at the North Pole or wherever I'd look at the price of oil to see if I might expect a good return. If the price is where it is because there is a real geologically inspired shortage I might invest but if the price is fixed by Saudi turning the tap off I'd be very cautious.

I understand your point - and yes you would be more cautious if Saudi (and the world) has so much spare capacity that the price was too low to justify investment.

But that wasn't what I was getting at.

I may have it wrong, but the impression I am getting from some posts/threads/articles is that there will be an even worse post peak shortage because of lack of investment now.

Its a fair enough point - but it isnt any different to how things have worked in the past?

In other words 15 years (1985 to 2000-ish) of sub $15 oil didnt stop us getting to 87mpd in 2008?

grinu · Post by **grinu** » 16 Dec 2008, 18:05

Will leaving oil in the ground longer rather than racing to produce it now not help lessen the initial severity of the decline when it commences?

skeptik · Post by **skeptik** » 16 Dec 2008, 19:50

http://europe.theoildrum.com/node/4870#more

biffvernon · Post by **biffvernon** » 18 Dec 2008, 08:12

At 39.19 our ticker seems to reached a new low, now that OPEC have announced their production cut

snow hope · Post by **snow hope** » 18 Dec 2008, 17:45

$38.32

£1 = $1.49
£1 = €1.04

snow hope · Post by **snow hope** » 19 Dec 2008, 08:57

Oil is down to $36.50 this morning, according to the ticker.

tomhitchman · Post by **tomhitchman** » 19 Dec 2008, 12:28

now 33.70 .... where will this end?