Quicker than a ray of light oil prices are plunging

The world consumption of oil will drop for the first time in 30 years, officials of the US Department for Energy said. The DOE and the World Bank revealed contradictory forecasts regarding the oil prices for 2009, which may make up $51 or $75 per barrel. The experts believe that oil-exporting and OPEC countries lose their influence on the price of oil because they do not observe their own export quotas. In addition, they are not prepared for coordinated reductions of the oil output, the amount of which will be discussed at the OPEC summit on December 17, the Nezavisimaya Gazeta wrote.

Photo: Quicker than a ray of light oil prices are plunging

Quicker than a ray of light oil prices are plunging

Specialists from the US Department of Energy believe that the average price for a barrel of oil in 2009 will make up $51. The global consumption is expected to drop by 50,000 barrels a day in 2008 and by 450,000 barrels a day in 2009. Such conditions envisage the reduction of the world consumption of oil for two years running during the recent three decades. The US specialists say that the consequences of the current world crisis prove to be more serious than expected.

World Bank experts said in their forecast that the average price on oil next year will make up $75 per barrel. Merrill Lynch analysts believe that a barrel of Brent oil will cost about $50 in 2009.

Even large oil exporters united in the Organization of the Petroleum Exporting Countries (OPEC) seem to be unable to handle the plunging prices on oil. A review published by Platts Company Tuesday said that the output of the cartel in November, save Iraq and Indonesia, dropped by only 950,000 barrels. OPEC members agreed to cut the output in November by 1.5 million barrels.

OPEC needs to make a considerable cut of its production to catch up with the decreasing demand. Even if they had cut their output by 1.5 million barrels, it would not have been sufficient, specialists with Platts believe.

Spokespeople for the oil exporting cartel say that they would most likely decide to reduce the oil output in the world after its emergency meeting on December 17. The prices are expected to go up afterwards .

Russia’s Minister for Energy, Sergei Shmatko, stated that Russia would determine its position regarding the reduction of the national oil output not later than December 17. The minister added that it would only be a small percent. Experts believe, however, that Russia needs to cut its oil production considerably, for there would not be any results achieved otherwise.