The Oil Muddle-II

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Some The Key Developments In The Price Of Crude Oil... Oil Below $70 As Demand Worries Trump OPEC Oil fell below $70 a barrel on 22 October, pressured by a gloomy outlook for the global economy that could limit the impact of any supply cuts OPEC might agree at a meeting on 23 October.Falls in Asian and European stock markets, plus the US dollar's rise to a 2-year high against a basket of currencies added to pressure on oil and other commodities.US crude for December delivery was down $2.86 at $69.32 by 0853 GMT, recovering from an earlier trough of $68.90 a barrel. Last week the price fell to $68.57, its lowest since June 2007 and less than half a record high in July. Oil Falls $2 After Record Surge After hitting a record high of $147.27 a barrel in July, oil dropped to $91 a barrel in the fourth week of September on mounting evidence that high energy costs and slowing economic growth were undercutting fuel demand in large consuming nations. Oil dropped $2 a barrel on 23 September, weighed by doubts about the US bailout plan and as investors booked profits after an historic one-day rise in the previous session. November Brent crude traded down $2.24 to $103.80. US oil consumption is running about 4 per cent below last year, according to the latest government data. OPEC Production Cut World oil prices rebounded on 9 September day above $100 a barrel after a surprise decision by the OPEC cartel to cut production by 520,000 barrels a day. Announced after a marathon meeting in Vienna, the cut immediately boosted prices which had fallen below $100 a barrel on 8 September, extending their dramatic decline from a peak above $147 in July amid a global economic slowdown. OPEC president Algerian Energy Minister Chakib Khelil said the output cut would start immediately. The International Energy Agency (IEA) meanwhile cut its estimate for global oil demand this year and next, saying consumers mainly in the United States are changing their lifestyles in response to high prices. Oil Surges To Record High Of $146 Oil jumped more than 3 percent to a record high above $146 a barrel on 11 July, boosted by concern of threats to supplies from major oil exporters Iran and Nigeria. US crude hit $146 a barrel for the first time and later rose as high as $146.90. A spate of missile tests by Iran, the world's fourth-largest oil exporter, in the past two days against a backdrop of rising tensions with Israel and the United States left the oil markets worried. Rebel attacks on oil infrastructure in Nigeria, the world's eighth biggest exporter, were also partly responsible for the nearly 50 per cent rise in prices this year. Oil has also risen due to persistent weakness in the US dollar. Investors have flocked to oil and other commodities this year as a hedge against rising inflation and the weak dollar. Too Slick To Pin Down India on 24 June arrayed alongside countries that challenge America's diagnosis of why oil prices are shooting up, widening a chasm that reduces the possibility of hard measures to check the spurt. At a conference of fuel producing and consuming countries in Saudi Arabia&rsquo;s Jeddah in the middle of the world&rsquo;s third &quot;oil shock&quot;, the kingdom offered to pump more crude but warned that a supply increase alone would not be enough to calm the markets. Finance minister P. Chidambaram rejected the widespread view in the West that demand (by India and China) was causing the phenomenal rise in oil prices. &ldquo;We respectfully reject the suggestion that rising demand is the cause of spiralling oil prices,&rdquo; Chidambaram told the energy meeting. Price Trend Fake? The market is full of oil and the rising price trend is &quot;fake and imposed&quot;, Iran's president said on 17 June, partly blaming a weak US dollar which he said was being pushed lower on purpose. &quot;At a time when the growth of consumption is lower than the growth of production and the market is full of oil, prices are rising and this trend is completely fake and imposed,&quot; President Mahmoud Ahmadinejad said in a televised speech. Iran, the world's fourth-largest oil exporter, has repeatedly said the market is well-supplied with crude and blames rising prices on speculation, a weak US currency and geopolitical factors. India Raises Fuel Prices, Provokes Protest After 10 days of debate over the price increase, the government raised its petrol and diesel prices by about 10 per cent on 3 June, the biggest increase in recent times. A litre of petrol sold in New Delhi now cost Rs 50.52 ($1.19) per litre, up Rs 5 or 11 per cent, and diesel at Rs 34.48 ($0.81) a litre is up Rs 3 or 9.5 per cent. Petroleum Secretary M.S. Srinivasan said the increase in fuel prices would raise inflation by 0.5 to 0.6 per centage points. India also agreed to cut the import duty on crude oil to support refining and retailing firms like Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp. India's leftist parties, key allies of the ruling coalition, responded with a call for a week of nationwide protests and strikes. Key Links Slipping Into Crisis: A Timeline Oil Squeeze (BW Issue 16 June) BW Opinion: Rigged Oil Market Comment: Oil Currency Hypocrisy (Complied by BW Online Bureau. Courtesy: Agencies)