Posted on 11/21/2008 9:17:28 AM PST by thackney
Oil prices are likely to sink as low as $35 a barrel without a massive production cut from the Organization of Petroleum Exporting Countries, Lawrence Eagles, head of commodities research at JPMorgan Chase & Co., said Friday.
OPEC needs to cut 3 million barrels a day to compensate for the bleak global economic outlook, which is expected to result next year in the
first contraction to oil demand since the early 1980s. The group agreed in October to reduce output by 1.5 million barrels a day, but OPEC is unlikely to successfully make further cuts quickly enough to prevent further declines in oil prices, Eagles said in a conference call.
"I can't see how they can manage to keep prices at a stable level," unless the group agrees in advance to continually cut production so long as oil remains below a certain level, Eagles said. OPEC is unlikely to adopt that tactic, known as a price band mechanism, he said.
Oil prices have plunged below $50 a barrel this week, to the lowest point since May 2005, just four months after reaching record highs above $145...
(Excerpt) Read more at rigzone.com ...
Start building breeder reactors and push it to $5.00 a barrel.
Gold is what you want. The liquidations to pay client redemptions is done. With its break of $771 this morning, Gold is likely starting a big move to $920 in the short term. After that too much is dependent on what Obama does to speculate.
The lower the prices go the more expensive it becomes for the companies to drill for and refine the stuff. The marginal costs will solve this at some point.
Still, $110 plus drop in prices is going to mean gas at $1.50.
Too bad no one has any money since those SUVs and pickups can be had for really cheap!
Unleaded Regular is $1.579 in NE Oklahoma today.
That’s exactly what we need. When China and India get out of the slump, energy prices are going right back up.
...uh...I mean...It’s all Bush’s fault! It’s a conspiracy! Dick Cheney diabolically pulled supply and demand out of equilibrium from his underground Halliburton bunker
Good. We paid too much for too long.
low prices bring....
And so the long running roller coaster ride continues.
Has nothing to do with my statement, Hydrogen Fueled cars become viable with cheaper electrical power.
It will continue until we start building infrastructure to take demand pressure off of oil. Hopefully, we will concentrate on making more of our own energy.
Sure, if you assume a couple leaps in a couple different technologies then almost anything is possible.
When the economy recovers, the price will go right back up without an increase in domestic supply. However, the economy isn’t going to rebound in the short term unless Obama suddenly starts reading Thomas Sowell, which is highly unlikely.
I don’t think $35/b is the bottom for oil. I think it will go much lower than that in the short term. It won’t matter what Opec does.
I suspect the combination of the economy, fuel prices and the recently elected administration, we should expect to see our dependency on foreign nations to rise, not fall.
You’re right. However, the increased use of nuclear power would free coal for coal-to-liquids conversions. This would give OPEC less control over our economy.
“Has nothing to do with my statement, Hydrogen Fueled cars become viable with cheaper electrical power.”
Agree with you that more nuclear (leading to cheaper electricity) would indirectly reduce demand for oil. For example, it seems to me that less home heating oil would be used in the northeast if it was cheaper to use electricity for such.
The great thing about the price drop is that at $40/bbl, Saudi Arabia, Iran, Russia and Venezuala have much less money to fund mischief and violence.
It won’t happen, but I would love to see a big tariff on imported oil combined with a cut in income taxes to make it revenue neutral. That would encourage domestic production, and take the profits away from oil exporters, while encouraging productive economic activity at home.
We need to expand that yellow wedge ... (yellow cake?)
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