Keller
10-16-2008, 06:51 PM
Fuck OPEC and fuck anyone sitting on oil futures.
Karma is a fucking bitch.
http://www.iht.com/bin/printfriendly.php?id=17027006
________________________________________________
NEW YORK: Oil prices plummeted Thursday, falling below $70 a barrel for the first time in 16 months, prompting the OPEC oil cartel to call for an emergency meeting next week.
The rapid decline in prices had alarmed both petroleum company executives and oil producers, who are becoming increasingly nervous that oil's roller-coaster ride undermines the stability of energy markets.
Oil prices have dropped sharply in recent weeks amid the economic crisis and lower consumption in developed nations. In New York, oil futures fell as much as 8 percent to $68.57 a barrel Thursday, their lowest level since June 2007. Oil has lost half its value since hitting a record $147.27 a barrel in July.
While not quite a rout yet, the precipitous drop undermines the elusive quest for stability that both oil producers and petroleum executives say they need to invest over the long term. The sharp decline Thursday prompted OPEC members to move up an emergency meeting - initially set for Nov. 18 - to next Friday, to look for ways to stem the price decline. Analysts expect the cartel's producers to reduce their production by about 1 million barrels a day.
The surprise announcement came a week after OPEC, the Organization of Petroleum Exporting Countries, which controls about 40 percent of the world's oil exports, said its members would meet in November "amid growing unease over the situation." But some OPEC members have been alarmed at the panic selling in commodity markets and successfully lobbied for an earlier meeting.
The concern now for producers is that the decline in prices could reduce future revenues and possibly crimp investments.
The Iranian oil minister, Gholamhossein Nozari, said in Tehran on Tuesday, "I think the low price is a real damage to the future of production."
The same question is also weighing on the mind of many energy experts. Does a period of lower prices mean the oil industry will repeat the errors of the past and sharply curtail its investments?
Since oil is a cyclical business, some energy analysts fear that today's downturn could set the stage for a new price rally if oil companies cut their exploration spending.
From its inception more than a century ago, the oil industry has gone through countless up and down cycles, and oil companies have often underinvested in periods of falling prices. The price collapse of the 1980s led companies to reduce investments and sparked a wave of mega-mergers through the sector.
But the industry's retrenchment in the face of lower prices left the world scrambling for oil when demand from Asian and Latin American economies soared over the past decade.
Now, after nearly a decade of growth, the economic slowdown means there will be less demand for energy in the foreseeable future.
These concerns were on the minds of petroleum executives who gathered at an industry conference in Venice last weekend. The titans of the oil industry worried that a prolonged recession, tighter credit, and lower energy consumption would mean slower growth in energy supplies in coming years. The credit freeze has already forced some projects to be scaled back, some energy analysts said.
"This is a real test," Jeroen van der Veer, the chief executive of Royal Dutch Shell, said during an interview on the sidelines of the conference. "Some people will be overstretched and there will be some delays in some projects."
The problem is that if companies pared their investments they would set the stage for a new surge in prices when demand eventually picks up, according to J. Robinson West, the chairman of PFC Energy, the consulting company hosting the conference.
Many experts have warned that such a crunch may happen within the next five years, and could once again propel oil prices into triple-digit territory. Over the past decade, the growth in oil consumption has outpaced the ability of producers to boost production.
A senior oil executive said that the industry was determined not to let history repeat itself. Many oil executives do not expect the current crisis to fundamentally alter the fact that developing economies will need more energy in the future. By 2030, more than three-quarters of the world's energy will still be derived from hydrocarbons, including oil, gas and coal.
"Investments in exploration and production are very much linked to the price of oil," said Didier Houssin, the head of oil markets at the International Energy Agency, which advises industrial nations on energy policy. "What we can fear is that the financial crisis leads to delays in many projects."
The drop in prices has already created problems for oil producers, who have become accustomed to high prices. Iran and Venezuela both need oil prices at $95 a barrel to balance their budgets, Russia needs $70 and Saudi Arabia needs $55 a barrel, according to Deutsche Bank estimates.
The Algerian oil minister, Chakib Khelil, estimated Thursday that the "ideal" price for crude oil was between $70 and $90 a barrel.
In Russia, which is not part of OPEC, the drop in prices is threatening the country's ability to increase production. The Russian government has reportedly agreed to allocate $9 billion to its four major producers - Lukoil, Gazprom, Rosneft and TNK-BP - to help them cope with investment needs amid the credit crisis.
In the United States, Chesapeake Energy, a gas producer, has recently indicated that it would reduce its capital investments over the next few years in response to falling prices.
Global oil demand is undeniably slowing down, particularly in developed nations. Japanese oil consumption tumbled by 12 percent in August, while in the United States demand fell by 8 percent in September.
Still, consumption is growing in developing nations, albeit at a slower pace than in recent years. The International Energy Agency expects global oil demand to grow by just 400,000 barrels a day this year, to 86.5 million barrels a day. At the beginning of the year, the agency was expecting growth of more than two million barrels for 2008.
"We pretty much know where supplies are going to come from in future years, but today the biggest uncertainty is demand," said Christophe de Margerie, the chief executive of the French oil company Total.
Karma is a fucking bitch.
http://www.iht.com/bin/printfriendly.php?id=17027006
________________________________________________
NEW YORK: Oil prices plummeted Thursday, falling below $70 a barrel for the first time in 16 months, prompting the OPEC oil cartel to call for an emergency meeting next week.
The rapid decline in prices had alarmed both petroleum company executives and oil producers, who are becoming increasingly nervous that oil's roller-coaster ride undermines the stability of energy markets.
Oil prices have dropped sharply in recent weeks amid the economic crisis and lower consumption in developed nations. In New York, oil futures fell as much as 8 percent to $68.57 a barrel Thursday, their lowest level since June 2007. Oil has lost half its value since hitting a record $147.27 a barrel in July.
While not quite a rout yet, the precipitous drop undermines the elusive quest for stability that both oil producers and petroleum executives say they need to invest over the long term. The sharp decline Thursday prompted OPEC members to move up an emergency meeting - initially set for Nov. 18 - to next Friday, to look for ways to stem the price decline. Analysts expect the cartel's producers to reduce their production by about 1 million barrels a day.
The surprise announcement came a week after OPEC, the Organization of Petroleum Exporting Countries, which controls about 40 percent of the world's oil exports, said its members would meet in November "amid growing unease over the situation." But some OPEC members have been alarmed at the panic selling in commodity markets and successfully lobbied for an earlier meeting.
The concern now for producers is that the decline in prices could reduce future revenues and possibly crimp investments.
The Iranian oil minister, Gholamhossein Nozari, said in Tehran on Tuesday, "I think the low price is a real damage to the future of production."
The same question is also weighing on the mind of many energy experts. Does a period of lower prices mean the oil industry will repeat the errors of the past and sharply curtail its investments?
Since oil is a cyclical business, some energy analysts fear that today's downturn could set the stage for a new price rally if oil companies cut their exploration spending.
From its inception more than a century ago, the oil industry has gone through countless up and down cycles, and oil companies have often underinvested in periods of falling prices. The price collapse of the 1980s led companies to reduce investments and sparked a wave of mega-mergers through the sector.
But the industry's retrenchment in the face of lower prices left the world scrambling for oil when demand from Asian and Latin American economies soared over the past decade.
Now, after nearly a decade of growth, the economic slowdown means there will be less demand for energy in the foreseeable future.
These concerns were on the minds of petroleum executives who gathered at an industry conference in Venice last weekend. The titans of the oil industry worried that a prolonged recession, tighter credit, and lower energy consumption would mean slower growth in energy supplies in coming years. The credit freeze has already forced some projects to be scaled back, some energy analysts said.
"This is a real test," Jeroen van der Veer, the chief executive of Royal Dutch Shell, said during an interview on the sidelines of the conference. "Some people will be overstretched and there will be some delays in some projects."
The problem is that if companies pared their investments they would set the stage for a new surge in prices when demand eventually picks up, according to J. Robinson West, the chairman of PFC Energy, the consulting company hosting the conference.
Many experts have warned that such a crunch may happen within the next five years, and could once again propel oil prices into triple-digit territory. Over the past decade, the growth in oil consumption has outpaced the ability of producers to boost production.
A senior oil executive said that the industry was determined not to let history repeat itself. Many oil executives do not expect the current crisis to fundamentally alter the fact that developing economies will need more energy in the future. By 2030, more than three-quarters of the world's energy will still be derived from hydrocarbons, including oil, gas and coal.
"Investments in exploration and production are very much linked to the price of oil," said Didier Houssin, the head of oil markets at the International Energy Agency, which advises industrial nations on energy policy. "What we can fear is that the financial crisis leads to delays in many projects."
The drop in prices has already created problems for oil producers, who have become accustomed to high prices. Iran and Venezuela both need oil prices at $95 a barrel to balance their budgets, Russia needs $70 and Saudi Arabia needs $55 a barrel, according to Deutsche Bank estimates.
The Algerian oil minister, Chakib Khelil, estimated Thursday that the "ideal" price for crude oil was between $70 and $90 a barrel.
In Russia, which is not part of OPEC, the drop in prices is threatening the country's ability to increase production. The Russian government has reportedly agreed to allocate $9 billion to its four major producers - Lukoil, Gazprom, Rosneft and TNK-BP - to help them cope with investment needs amid the credit crisis.
In the United States, Chesapeake Energy, a gas producer, has recently indicated that it would reduce its capital investments over the next few years in response to falling prices.
Global oil demand is undeniably slowing down, particularly in developed nations. Japanese oil consumption tumbled by 12 percent in August, while in the United States demand fell by 8 percent in September.
Still, consumption is growing in developing nations, albeit at a slower pace than in recent years. The International Energy Agency expects global oil demand to grow by just 400,000 barrels a day this year, to 86.5 million barrels a day. At the beginning of the year, the agency was expecting growth of more than two million barrels for 2008.
"We pretty much know where supplies are going to come from in future years, but today the biggest uncertainty is demand," said Christophe de Margerie, the chief executive of the French oil company Total.