Crude Oil Tumbles Below $36 as Demand Drop Swells Inventories: $25 within sight

Discussion in 'General Discussion' started by Birdman, Dec 18, 2008.

  1. Birdman

    Birdman Active Member

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    Dec. 18 (Bloomberg) -- Crude oil fell below $36 a barrel for the first time since June 2004 as declining demand created a glut of crude and the weakening economy undermined OPEC’s efforts to reduce supply.

    JPMorgan Chase & Co., the largest U.S. bank by assets, reduced its 2009 average oil price forecast to $43 a barrel from $69 as a global economic slowdown causes a contraction in demand. The prospect of oil falling to $25 is “hard to dismiss amid a serious deterioration of economic conditions and building stocks,” the bank said in a report released yesterday.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a956vt6xK5Rk&refer=home
     
  2. Brett

    Brett Active Member

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    Does that mean V8's will go up in value? :rock:
     
  3. whizzkid11

    whizzkid11 Active Member

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    Question is what is at the forecourt?
     
  4. seymansey

    seymansey Active Member

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    On the World Service this morning, it was said that Open agreed that it would cut output ( http://news.bbc.co.uk/1/hi/business/7786456.stm ), but at the same time it was suggested that it was unlikely that opec members were to cut output by too much since they were quite happy with shifting the oil.

    EDIT: It helps if i read the OP more carefully..!
     
  5. grober

    grober MB Master

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    Refinery capacity??

    Its hard to escape the possibility that the increase in OIL demand and hence price in the last couple of years wasn't the trigger for the whole " house of cards" of western economies running on huge amounts of credit falling apart. :eek: This wasn't helped of course by the emerging economies such as India and China subsidising their fuel prices in their own markets. Its rumoured that the huge increase in demand could not be met by "turning on the crude tap" a bit more because there simply wasn't enough refinery capacity in the world to meet the demand. Result was the price rocketed on the world market. Unfortunately this lack of refinery capacity still exists so if demand again rises after the price falls the same situation will arise. It looks as if we are locked into a cycle of price rises/falls until that refining capacity problem is addressed ( would take a couple of years to build I believe if anyones' prepared to invest the money?:confused: ) or oil consumption will have to stabilise at a lower level than before with all the implications that has.:(
     
  6. jeremytaylor

    jeremytaylor MB Enthusiast

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    And, hey, hasn't the pump price dropped? NOT
     
  7. kwakdonut

    kwakdonut MB Enthusiast

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  8. Dryce

    Dryce MB Enthusiast

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    I think the oil price was as much down to the markets going wild and speculative moves into commodities.

    Lack of refinery capacity shouldn't riase the cost of crude - just the cost of the refined products. If anything you could argue that if there isn't sufficient capacity to refine/process a raw material then the underlying cost of that material should drop (too much supply for the processing bottleneck).
     
  9. johnsco

    johnsco MB Enthusiast

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    What's the betting that - Even now - The government are working out the next wheeze to fleece us some more !!
    Johnsco
     
  10. Dieselman

    Dieselman Banned

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    Of what relevance was that to this thread.?
     
  11. Dieselman

    Dieselman Banned

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    I think consumption will stabilize at a lower level as many people and Countries have suddenly woken up to what high priced oil means, so are becoming more efficient with their use of it.

    It's not just road fuel that uses oil so do all plastics manufacture and energy production. these areas have come under the spotlight and demand is being addressed for various reasons.
     
    Last edited: Dec 19, 2008
  12. Ade B

    Ade B MB Enthusiast

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    What will be the impact on UK income as Brent Crude is also down..

    Ade
     
  13. crockers

    crockers MB Enthusiast

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    Has anyone had their electricity or gas prices drop?? Sure went up quickly.....
     
  14. Dieselman

    Dieselman Banned

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    Did they.? I understood the energy companies sat on much higher wholsale prices for about six months before passing the rises onto the customer.
    Anyone have any info.?
     
  15. miro

    miro MB Enthusiast

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    Lets put together about 2 years worth of economic analysis in a few lines

    - cyclone blows in Gulf of Mexico
    - Oil goes up
    - Lets keep it high
    - Lets make it more
    - Woohoo this is fun
    - World runs out of cash thanks to oil prices
    - Time to change nappy.

    Consumables must NEVER double or triple in price. That is just a basic rule of economics. Now it becomes clear that OPEC is a price-fixing scam.
     
  16. mattc

    mattc MB Enthusiast

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    of course OPEC is a price fixing cartel. It always was. but were we the fools for believing we could always enjoy cheap energy?

    The sooner fuel cells are adopted the better. The oil producing nations know this which is why you see areas of the middle east desperate to develop tourism and trading hubs before the oil revenue starts tailing off. They know we will go back to ignoring them and trating them with distain.
     
  17. Dieselman

    Dieselman Banned

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    It'll never happen. How do you intend to generate the Hydrogen and indeed where will all the precious metals required to build them come from.
     

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