Cause for much celebration was an article in last Saturday's Times, which explains that now crude oil prices have collapsed, a lot of these Petro-States have had the carpet pulled from under them, as beautifully illustrated by the pretty graph that accompanied the print version:
It'd be nice if crude prices dropped below $55 to teach the Saudis a lesson in humility!
* If you Google the phrase, it appears to have entered common usage last weekend, although I'd love to know who coined it. In the absence of any evidence to the contrary, I think I'll credit James Bone, Tony Halpin and Michael Theodoulou.
Wednesday, 22 October 2008
The Axis Of Diesel*
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4 comments:
My thoughts are that it will trade at about $80 +- $10. The Sudis will control supply to keep themselves in surplus but won't do so to help Iran.
I'm not sure I believe these figures for break-even points.
It was only a couple of years ago oil was at 20 dollars a barrel - the target OPEC price. Why would the break-even point we see now be so much higher?
BX, there was a longer article in yesterday's FT explaining that this is not cost of production, the break even price is the price that each Petr-state requires to maintain government spending/bribes at current levels.
Not fussed about Iran, Russia and Venezuela hurting, but as much as i'm sure the Saudi’s didn't mind all the extra money coming their way, i hardly saw them as a cheerleader for the very high prices we saw earlier this year, i think quite rightly they knew that the high price would be biting the hand that feeds it and demand would drop/crash. They didn't seem to be using oil as a weapon like the other three who routinely threatened "this and that" about cutting off oil or redirecting it else where.
but like Lola said i don't think we'll see Saudi rushing to help Iran and the like. Iran and Venezuela are no doubt demanding this cut in production hoping that it will be the Saudis as per usual who cut their production while they continue to produce above their quota
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