Arab Gas

After a long night of petroleum based darkness the falling prices of gas are staring to let we, the people, breath again. It's sad to say but I'm glad to see the prices nearer to $3.20 again rather than $4.20. If we think back I'm sure we can all remember earlier this year when gas prices started their solemn march of doom up into ridiculous prices . That seems to be when all the food prices started to climb and then, consequently, everything else went up in price. After that, people stopped spending so much money and that, I believe, is when the whole happy-go-lucky housing market came crashing down, putting us in our current financial situation.

Now there is a little light of hope. Gas prices are going down which, if it acts the same way as when they went up, will eventually allow prices to come back down a little. This could ease all our budgets in time for Christmas.
Here is an article telling us what the Oil nations want to foist on us. In it they say rising gas prices are not responsible for the current market situation. This may be only partly true. Their solution for gas prices going down is not to let them and allow demand to go back up but to cut production and increase prices. When are we going to use our own fuel?

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Oil prices continued their steep losses despite an announcement by the OPEC cartel that the producers will cut production by 1.5 million barrels a day next month.Friday, crude oil closed at its lowest level since May 31, 2007, settling at $64.14 a barrel, down 5.4 % or $3.69.

The oil producing nations called an emergency meeting in Vienna, Austria, on Friday and voted to slash production in an effort to stop oil prices from plummeting further. There was some speculation that the meeting could last several hours, with cartel members such as Iran pushing for cuts as high as 2 million barrels per day, however, it took less than two hours for producers to agree to cut 1.5 million barrels per day in November.

"Oil prices have witnessed a dramatic collapse -- unprecedented in speed and magnitude," said a statement released by the cartel.

Following the announcement of the production cuts, OPEC President Khelil was asked if a decrease in oil production would negatively impact the global economy. Khelil spoke adamantly against the assumption.

“Oil is not responsible for the market turmoil, it is the mismanagement of economies,” he said.

Khelil went on to assert that the price of oil by itself does not have an impact on the global economy. He said it actually supports economic growth and the high prices in July were motivated by speculation; they had nothing to do with supply and demand. Khelil said he suspects speculation is what is driving the U.S. dollar higher now.

The recent plunge in oil prices on fear of a global economic slowdown appeared to trump any efforts to decrease production. The commodity continued to trade lower, dropping as low as $62.65 Friday morning.

“Looking at the crude oil—it was following the Dow tick for tick,” said FOX Business contributor Phil Flynn of Alaron Trading. “Oil is totally focused on the health of the stock market right now. If the stock market does well, oil could rebound and it could rebound in a big way, regardless of what OPEC does…if the stock market looks ugly, oil, at least for the short-term, is going to look pretty bad.”

John Kloza, chief oil analyst for the Oil Price Information Service doesn’t think any action by OPEC will impact the market much.

“I don’t think that OPEC could have done much to stem the slide in 2008,” Kloza said. “This is tied to worries about a global recession and those will persist through new year, no matter what.”

Kloza thinks crude prices could fall near the mid-$50 per barrel range if the price drops below $62 per barrel early next week.

“It’s kind of like the Dow breaking 10,000—if the price of crude doesn’t stabilize as it approaches $62, you’re going to get a much larger drop,” Kloza said.

Coming into the day, crude was off its July high of $145.29 by 53%, after gaining $1.09 per barrel on Thursday, closing at $67.84.

OPEC will meet again in December, and could push for more production cuts if oil prices do not stabilize by then. The next meeting will be held in Algeria.

Natural gas fell 5.3% on Thursday to $6.419, and continued that fall on Friday, with prices falling an additional 18 cents to $6.239, the lowest settlement since September 21, 2007. RBOB Gasoline fell 6.3% or 9.99 cents on Friday to settle at $1.4779 per gallon, the lowest level since January 2007. Heating oil prices dropped 4.1 % or 8.32 cents to $1.9465 a gallon; August 2007, was the last month when the fuel closed below $2.00 per gallon.

http://www.foxbusiness.com/story/markets/industries/
energy/oil-plummets--despite-opec-production-cut/