Saudis: Oil Prices Could Plummet<o></o>

<st1:country-region w:st="on"><st1>Saudi Arabia</st1></st1:country-region>'s oil minister warned Arab producers Sunday not to expect continued growth in prices and demand for oil. Ali al-Naimi said prices could plummet if an economic crisis drives industrialized nations to find other sources of energy, citing the 1980s - when oil prices dropped by 80 percent after such nations reduced their dependency on oil and turned to alternative energy sources. In April 2004, FIR predicted that oil prices would skyrocket from $29 per barrel to over $60 within 12 months. That forecast was dead on! "Global economic growth may not continue at the same good momentum for years to come," al-Naimi said at the opening of a four-day conference of Arab energy ministers in <st1:city w:st="on"><st1>l</st1></st1:city>"We should be careful and not take expectations as indisputable, especially the continuation of big demand for oil and its prices remaining at the same level or increasing," he said. Al-Naimi also cited the Asian economic crisis of 1997-1998, when oil prices fell by 50 percent, slowing Arab oil production. "Some are even concerned about a looming economic problem because of the increased policies of economic protectionism, or what is known as economic nationalism," al-Naimi said, referring to Western countries' determination to become less dependent on Middle Eastern oil. Sixty percent of the world's oil reserves lie in Arab countries, one third of global production comes from Arab sources and 40 percent of all oil business is conducted by Arabs, he said. Global oil prices fell but finished last week roughly $2 a barrel higher, as traders' concerns about geopolitical threats and refinery snags outweighed evidence of rising supplies and forecasts calling for weakening global demand. Crude futures dipped toward $72 a barrel Friday after the International Energy Agency reduced its 2006 world oil demand forecast. Earlier in the week, the U.S. Department of Energy said domestic gasoline supplies increased for the second straight week.

 

I wouldn't read too much into PR efforts, especially since the situation today is markedly different. In the 80's, China and India was using a lot less oil.

 

They could go down and they could go up. if you think you know which one, start buying oil futures.

I'm of the opinion that price is going to stay relativley high for the next five or ten years. I'm confident production can't increase much, and demand looks to be staying stong, despite the high prices.

If a major recession were to hit North America, that would have a large impact on oil prices, since consumption would decrease. Still, I think demand from the rest of the world would compensate somewhat.

 

Steve Forbes said oil will be $35 a barrel by the end of the year....who knows??

 

Oil may have had a local peak and price may drop $5 - $15, in a couple of weeks, but it may never be under $50 in the foreseeable future. (I wish I'd be wrong)

Oil is a limited, non-renewable resource where supply to the market is constrained by more than one way, so I believe low oil prices may be a thing of a past.

Of course, politics can have a tremendous effect on price, but that usually only work one way. ( -- jacking up the prices ) .

 

That will never happen, too much greed involved and with an oilman in charge or should I say in the top position of the US he's only looking out for his best interests. There's no such thing as plummeting oil prices in this greedy world.

 

it's happened before


http://zfacts.com/p/35.html

 

I hope you are kidding. Greed is what has reduced the price of oil many times over the last 100 years. You see, everyone wants to get in on the act and production goes through the roof. Eventually, the price drops. I'm banking that oil will be $58/bbl by year end barring something crazy.

 

Well, I think we need to define the meaning of "plummet" first. May be difficult to draw a line, but given the $75 or so price not long ago, I think $35 would probably low enough for 'plummet'. But $58 is only $15 or 20% so below the current price, and that much change is not unlikely, given that a good portion of oil price is just a somewhat artificial markup based on fear, war, and future uncertainties, like what if the US bombs Iran? Which given that imbecile administration, isn't entirely impossible.

 

I think I can say pretty confidently that everyone IS in on the oil act. Everyone who has the experience or capital to do so anyway. Globally it's pretty much impossible to find an exerienced petroleum Engineer or Geologist. Plus, Drilling rigs are nearly impossible to find, even if you have the money.

Each new barrel of oil is harder to find than the one that it's replacing, because the easiest stuff was used up years ago. This adds up to increased expense, and a higher cost of production.

With the way costs are right now, if the market price did fall to $20, 30 or even 40 dollars a barrel, quite a few wells would simply be shut-in.

 

"Which given that imbecile administration, isn't entirely impossible."

I knew better than to comment on this topic. Someone always feels the need to hit a hot button. Have fun. I'm gone.

 

Unfortunately, politics and oil prices are intricately intertwined. If not for the current administration's missteps, oil prices wouldn't be as high as they today. They may still be $40 or $50, but definitely not $70+.

 

You insult the Republican in office, but isn't it the Democrats that are holding up drilling in alaska? Isn't it the liberal lobbyist groups that are pushing the EPA to raise standards for clean emmissions? Isn't it the liberal party that shouts gloom and doom which has a very real effect on the price of oil in the futures market? When you have a dictator like Saddam in power and he invades countyries for no reason(Kuwait), and the instability caused by such a ruler in that delicate region can you expect prices to stay the same? When Iraq settles down there will be a much more stable Middle East. Maybe before you slam an administration doing the right thing for the safety of our country you should look at the real facts behind the rise in oil prices.