Prices and Consumption
Oil prices had another volatile week in the midst of the US elections, threats from OPEC, and more bad economic news. Starting in the mid-$60s, prices made it up to $71 a barrel on Tuesday only to slide steadily for the rest of the week to close out at $61.04.
More
Production Cuts
From all indications, OPEC appears to be making a serious effort to reduce production and exports in the face of falling prices. The Saudis are reported to have cut exports by 900,000 b/d from their August peak; the Kuwaitis say they have cut exports by 100,000 b/d; Venezuela says it has notified customers of cuts totaling 129,000 b/d; Shell says
Investment Continues to Fall
The worldwide financial liquidity crisis continues to affect future oil projects. Major companies say that projects with financing already in place are expected to continue as planned, but that those programmed for completion after 2012 are likely to be placed on hold until the global economic situation improves.
The forthcoming IEA report
Last week the International Energy Agency released the 12 page executive summary of the World Energy Report 2008 that is due to be released November 12th. Judging from the summary, the report is a curious mixture of unreality and an unprecedented warning of an energy crisis to come. The Agency still maintains there is enough oil to maintain current rates of production for the next 40 years. At
Detroit
The future of the American automobile industry is hanging in the balance and is likely to be decided shortly. New reports of plunging sales and large losses make it likely that the big three automakers will be insolvent in a matter of months if not weeks. Early last week the Bush administration
Briefs - November 10, 2008
Jeff Rubin, Chief Economist at CIBC World Markets says that the current recession is caused by high oil prices. Defaulting mortgages are only a symptom of the high oil prices. Higher oil prices caused Japan and the Eurozone to enter into a recession even before the more recent financial problems hit. Higher oil prices started four of the last five world recessions; we shouldn’t be too surprised
Quote of the Week
“For the gas industry, peak gas output could come sooner than expected, ‘maybe not too different from peak oil,’ Shell executive vice president John Mills told delegates at the ADIPEC conference in Abu Dhabi on Wednesday.”
