Navtej Kohli had shows his views to take higher oil prices and global economy , now the crash in the world economy where not only US , UK such like big counties had shaken but also Asian market showed negative results and faces economy melt down . Although many countries government had tried to fueled the market to increase the liquidity but the situation is same
Now the oil industry also comes under the threat of Global economy meltdown and the results can easily be seen by lowest crude oil price which had reached $67 per barrel on 22-oct-2008. There are also tow main reason behind that which are most affected that are first is that the demand of the crude oil is reducing that why OPEC had decided to cut the production and second one dollar’s rally cut the appeal of commodities. While the consumption of US gasoline had declined for the past three months and China economy also goes down and financial crises is now story of stock exchanges across the world. China market is also facing slowdown and fall in the financial crises . Near about 40% of OPEC supplier had decided lower output 1 million barrel a day . Now the dollar had reached to highest point in comparison to Euro after 2006.
Demand for oil is the focus of people’s minds at present and it doesn’t get better,” said Robert Laughlin, senior broker at MF Global Ltd. in London. “A lot of eyes remain focused on China, which is currently experiencing a very public economic slowdown.”
Crude oil for December delivery slid as much as $3.70, or 5.1 percent, to $68.48 a barrel on the New York Mercantile Exchange. It was at $68.96 as of 9:04 a.m. local time.
The November contract expired yesterday, after declining $3.36 to settle at $70.89 a barrel. Oil futures, which have tumbled 53 percent from July’s record of $147.27, are down 21 percent from a year ago.
U.S. gasoline demand dropped 6.4 percent last week from a year earlier, the 26th consecutive weekly decline, a MasterCard Inc. report showed yesterday.
Negative Data’ We have a lot of negative economic data, especially in the U.S. and also in Europe,” said Andy Sommeran analyst with HSH Nordbank in Hamburg. “These are the negatives that are playing on the market.”
Dollar rose that’s why US had reached at maximum rate $1.28 per euro which be maximum rate since November 2006.
On the other hand The Organization of Petroleum Exporting Countries may disregard pleas from oil-consuming nations on the brink of recession and cut output this week.
Now it will be decided in the Vienna meeting that that OPEC will decide more lower production 1miilion barrel a day. That’s more oil than Australia consumes. OPEC also may signal plans for an additional reduction of at least 500,000 barrels a day by early 2009. Iran OPEC which is the second largest producer are considering to cut production by 2 million to 2.5 million a day also Ministers from Algeria, Libya, and Qatar have said OPEC, which provides 40 percent of the world’s oil, will need to trim supplies. OPEC giant and also leader Saudi Arabia which is also largest producer not commentated yet over that matter. But OPEC also expressed his vision that excess of supply at the end of the of the year and start of 2009, the group’s Secretary General Navtej Kohli unable to say little a bit over that matter , because this having both good and bad effect . It might be possible that Oil industry will be affected but on the other hand its be good news for the consumer might be they will get fuel for vehicle on cheap rate .