Thursday, 20th November 2008 - 15:24CET
Oil dives below $50
Oil plunged below $50 a barrel today, deepening losses over the previous four sessions as battered financial markets reflected ever lower confidence in the world economy and evidence mounted of falling fuel demand.
US crude fell $3.71, to $49.91 a barrel by 3.02 p.m. (Malta time), the weakest level since January 2007.
London Brent crude shed $3.10 to $48.62 a barrel.
As economic slowdown has destroyed fuel demand, oil companies plan to store millions of barrels of oil in the hope economics will improve.
Shipping brokers said US oil trader Koch and Royal Dutch Shell had booked supertankers capable of storing 10 million barrels of crude, more than top exporter Saudi Arabia produces in a day.
Oil has lost about two-thirds of its value since July's record above $147, in part because a global credit crunch has made investors pull their money out of riskier assets.
The falls on oil have mirrored weakness on equity markets, which dropped again today when European stocks hit their lowest level since March 2003.
"Weakness in stocks reflects weakness in the economy at the moment looking forward, but I think the general trend in oil is lower anyway," said Sucden's head of research Michael Davies.
"It's a bit of a chicken or egg thing. Everything's moving together, it's hard to say what's leading."
Oil differs from other commodity markets in that producer group the Organisation of the Petroleum exporting Countries can intervene to curb supplies, in theory providing support for prices.
Since early September, OPEC has said it will remove around 2 million barrels per day from international markets, but the market has taken the view falling demand is a bigger factor than tightening supply.
Deutsche Bank said yesterday oil could fall to as low as $40 a barrel next year.
Fears about their falling revenues have prompted some members of OPEC to urge further cuts as soon as possible and ministers are to gather for informal talks on November 29 in Cairo.
They will also meet again for a formal session on December 17 in Algeria.
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Also do not wait for the 4 energy savers, Fix these when they arrive, but go out and buy some NOW and install them in those rooms that you use most, kitchen living room, .... That is 80% of your lighting consumption. hjence at 1/5th consumption you will be saving 60% plus of your lighting costs.
Any more help? just ask..
Oh by the way the Midddle East geo-politics are still there. Nothing has changed. Let's see what the new US administration will do?
Let's keep on hoping. Thank God I sold before September.... If any of you have any oil and gas stocks hold on don't sell now.
It did not because yesterday there was a write up in The Times where it was stated that EneMalta only buys oil month by month, so what the Gonzipn has been telling the people is a lot lies.
Well, it turns out that I was wrong as I should have said "BELOW $50 a barrel"
You are right in your comments but please note that since our last budget I have been trying to contact various Government Departments to get more information on the photovoltaic, double glazing incentives to no avail. Whoever I speak to points me to another department so I just lost faith in this proposal altogether especially since it was capped to a few hundreds.
If you have any information please share it with us.
Ara vera pajjiz tal-Mickey Mouse!!!!
I can definately make more money like this instead of putting money in banks and getting peanuts!
Really and truly you must admit that your PM be it 1 , 2 or 3 has failed YOU and ME and EVERYONE miserably !!
I kindly invite you to read Austin Sammut`s article on the Times this week who is surely not known to be a labourite and after feel free to comment
The future is NO NEED FOR OIL, NO OPEC
You must be confusing me with somebody else. I did not attend the "manifestazzjoni."
The Maltese democracy has failed on this subject. The government seems to be incompetent. They hold back information, transparency is nowehere, and the reasoing is not logic.
The opposition makes nice speeches, but don't act. A 1 seat majority can easily be turned into a 1 seat minority in a real democracy. There are no efforts to do so in Malta.
The speculators just don't have any money left to play with it on the oil market.
Now we see the real price of oil. The high prices in the past were just a result of gambling by a few traders on the worldwide financial markets.
For example, in 1996 petrol in Malta was about 30 per cent cheaper than in Germany.
Today in Malta it is 18 per cent more expensive than in Malta.
During the past years the Maltese benfitted from their governments' policy on the purchasing of oil.
But now they have to pay the price for it.
Lawrence Gonzi is Malta’s only prime-minister. But if the Socialists insist that Lawrence Gonzi is Prime-minister 1, Austin Gatt is prime-minister 2 and Tonio Fenech is prime-minister3, then logically Dr Muscat is prime-minister0.
On a serious note, the falling price of oil is not all good news. Readers might find this article interesting: http://money.uk.msn.com/investing/articles/nicklouth/article.aspx?cp-documentid=11064352
Since you are the one of those who did stand by Muscat on the stand during the manifestation, you should also be aware that during his reply to the budget speech, Dr Muscat told the Government to buy oil on that day….when price was 65 dollars…..so what’s your answer now? How much would we have paid extra as a country should we have listened to Dr Muscat? Did he give the same advice to Iceland too?
....THIS SHOULD TEACH US A LESSON. We should all reduce our dependancy on oil to cover ourselves from another huge increase in oil prices. We should start taking the government subsidy schemes on solar heaters, energy saving light bulbs, photovoltaic panels, wind turbines, AAA appliances, smaller cars, etc etc. THIS is the message of the government in the last budget....do not let yourselves be mislead by other people with other motives because they will not be paying your bills.
One more comment: OPEC should be declared an illegal entity by the international community for acting as a cartel.
So it basically means that until the current agreement terminates, no mater what the price of oil would be, we'll still have to pay the same price. Similarly, it also means that the gov is not making any more profit either.
What I would however expect is that the gov is transparent and makes public the exact status.
I hope the OPEC countries go bust as well!