Gleanings from Fatih Birol’s presentation of the WEO 2008 to the Council on Foreign Relations
Last week, Fatih Birol, chief economist to the International Energy Agency, presented the IEA’s World Energy Outlook 2008 to the Council on Foreign Relations in New York City. In an unusual gesture, this CFR session was opened to invited guests, which is how I cleared its thick oak doors. As the program noted, ‘The World Energy Outlook series is widely recognized as the most authoritative
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Prices and Production: IEA Cuts Demand Forecast
OPEC’s failure to act at its November 29th meeting, coupled with a steady stream of bad economic news, sent oil steadily downwards from an opening price of $55 a barrel last Monday to a Friday close of $40.81. It was the biggest one week drop in oil prices since 1991. Bets that oil for January delivery will fall below $20 a barrel were actively traded in New York on Friday. Merrill-Lynch foresees
OPEC and Russia are Hurting
Only a few months ago OPEC and Russia were on top of world with oil revenues breaking records day after day and their prestige and influence expanding. Now with OPEC oil selling for somewhere in the low $30’s and faced with the possibility that it will go still lower, even the richest members of the cartel, those with relatively small populations, are now in trouble. With oil sales their only
Detroit in the Balance
For a second week, the world’s attention was focused on efforts in Washington to sustain the US automobile industry. GM and Chrysler claim they will be out of operating cash in a matter of weeks, leading to millions of layoffs and a serious deterioration of the US economic situation. The industry and its many supporters maintain that a bailout of almost any conceivable size would be cheaper than
Briefs - December 8, 2008
Rental rates for deepwater drilling rigs continue to surge as a worldwide shortage of vessels used to search for oil outweighs the drop in crude prices. Lack of financing is preventing smaller companies from following through with plans to build new vessels. (12/6, #4) The world’s biggest shipyards will record the lowest LNG tanker orders in a decade as charter
Quote of the Week - James Ritterbusch
“OPEC is going to have to show much better compliance [with announced oil production cuts]. They must feel somewhat dejected that the cut that was thrown at the market has had almost no impact. Although they aren’t powerless, they can do very little to support prices until there is a semblance that demand is leveling.” – James Ritterbusch, President Ritterbusch & Associate
