Current Oil Price

[biffvernon]

It is clear that our most pressing challenge is price volatility

I'd have thought supply might be more fundamentally important than price.
http://news.bbc.co.uk/1/hi/uk_politics/7791269.stm

[PowerSwitchJames]

Any chance of oil going into negative figures???


Wow, confidence in the global economy is just totally shot to pieces.

If this ain't the economic effects of peak oil, it'll do until it gets here!

[Ben]

Hmm.... apparently governments should cut fuel duty to keep people addicted to heavy oil use; thereby encouraging oil investment (see below).

But if I recall correctly when oil prices were very high, and the west was howling in pain, some oil producers suggested that the solution lay in own hands - cutting fuel duty.

OPEC calls on UK to cut fuel duty or risk a long-term spike in oil

Saudi Arabia's oil minister Ali al-Naimi and Abdalla S El-Badri, secretary-general of OPEC, said low demand was "wreaking havoc" for oil producers. The producers claimed the collapse of prices to a four-year low of $36 a barrel is harming investment in the sector, creating supply problems for years to come. "A number of upstream projects have already been cancelled or delayed," Mr al-Naimi said at a meeting of energy ministers in London.

A cut in fuel duty, according to OPEC, would encourge cash-strapped consumers to buy more petrol, bolster demand for oil and encourage producers to develop new supplies.

Full story Telegraph, 19/12/08

[Silas]

Worldwide Millions of people will soon be out of work, millions of them would have been driving (some, many miles) to work last year! thousands of companies will go to the wall, factories cut production, airlines going bust, its all very interconnected is that energy use thing. Interesting times

[biffvernon]

Abdalla S El-Badri was on the radio at lunchtime and seemed to be talking even more nonsensically that Gordon Brown.

[Andy Hunt]

Abdalla S El-Badri was on the radio at lunchtime and seemed to be talking even more nonsensically that Gordon Brown.

Seems like people's brains are melting down with the world economy.

[snow hope]

I found this article on the BBC web site front page this afternoon, but when I went back to look for it to post a link on here, it had been well and truly buried!!!

It is the head of OPEC, stating that he considers PM Brown is confused over oil prices......... worth a read!

http://newsvote.bbc.co.uk/1/hi/uk_politics/7791985.stm

[Ben]

Promise of Opec cuts fails to stop oil price slide

Investors delivered a vote of no confidence in Opec last week when oil prices fell by their most in almost two decades even though the cartel decided to curb production. Oil prices fell 26.8 per cent last week to $33.87 a barrel, down 77 per cent from the record peak in July, the steepest decline in history.

Since the $100-a-barrel level was reached for the first time on January 2, crude has dropped 65 per cent, on track for a record annual decline. Opec hopes that the supply cuts agreed last week will stabilise the oil market, but has already said more reductions could be considered.

... Last week’s price fall was exacerbated by the expiry on Friday of the January US futures contract, but oil for delivery in February still fell 13.8 per cent over the week. The continuing decline in crude prices following Opec’s announcement on Wednesday of the largest single production cut in the cartel’s history has already led to pressure for more action from the oil producer’s group

... Deutsche Bank, which is forecasting a fall of 1m b/d in oil demand next year, warns “additional supply cuts will be required throughout next year”and says oil prices might not recover until the first quarter of 2010. The extreme weakness in the short-term prospects for demand is also reflected in the steepness of the futures curve with oil companies able to earn a gross profit of $12.80 a barrel (excluding storage costs) simply by being prepared to put crude into storage until the end of the year.

Full story Financial Times, 21/12/08

[PS_RalphW]

WTI back (briefly) above $50.

http://www.post1.net/lowem/page/livequotes

[RevdTess]

Yep new "2009 high" of 50.49 for WTI (Feb contract). Although fundamentally there is still plenty of crude over-supply in storage, things are starting to look more bullish again as OPEC members cut largeish chunks out of their loading programmes for January and February and geopolitics in Gaza and Ukraine encourage speculation in energy.

Not sure how long it lasts, but this is the first significantly bullish week in the oil market since july.

[DominicJ]

Any thoughts on Iran/Bahrains oil weapon threat?

I'd just ignored it as bluster, but your smarter than me.

[RevdTess]

Any thoughts on Iran/Bahrains oil weapon threat?

I'd just ignored it as bluster, but your smarter than me.

Smartness is irrelevant when it comes to geopolitics I think, although it's nice of you to say so. I've seen a lot of clever people get it totally wrong over and over again about so many things since I've worked in the oil markets...

I think an oil embargo would certainly put the cat among the pigeons, and part of me would cheer it, but I don't see it as very likely right now. The Iranians already dont sell anything to the US and not all that much to the EU either, so their sting is mild unless they can persuade others to join in, and I don't see any sign of willingness to do that.

They did do it once before of course, back in 1973, but that was because the US was physically helping Israel in the Yom Kippur war (according to wiki. I was two years old at the time and had other concerns).

[Ben]

According to our ticker oil is down $5.71 at $ 42.87.

I'm surprised given all the tumult in the Middle East and the current insecurity over European gas supplies.

[RevdTess]

US inventory numbers came out and were very bearish. Back to falling crude prices again for the time being...

[PowerSwitchJames]

$36.50 according to our ticker. Could it go below $30?