Got back my Streamyx yesterday after one week of screaming obscenities at TmNet's talking machines.They have gone completely futuristic, you talk to a machine that talk endlessly about the company but can't understand your plea for help.This company is helmed by a bunch of jackasses.A typical trademark of government-linked companies.
On 11 October I wrote on the expected price decline of crude oil due to declining demand in global consumption brought about by the global recession.
In my article "Where Crude Oil Heading For" I predicted that price would fall below the US$50 per barrel before the end of the year.OPEC is now taking steps to cut down production to stabilise prices.
Many OPEC members were over-spending their windfall for the past 18 months on the assumption that oil price would stay at high level.The spending spree in some OPEC countries have been unashamedly financed by other consuming countries forced to pay ridiculously high price for one of the most essential commodities in the modern world without which it can bring untold human miseries and paralyse the world's industry.The high price have to certain degree played an important part in the global economic chaos.
OPEC accounts for 40% of global oil supply and can influence or control prices in a stable economic situation by cutting or increasing production output.In a severe economic downturn the law of supply and demand would decide the idle price the global market should pay.The picture is increasingly moving in that direction and OPEC are now trying to stop the price free fall with cut in production, which they will find increasingly difficult to control as the recession moves into high gear in other industrialised countries.There would be major decline in industrial output in India and China starting in the 1st quarter of 2009.
OPEC countries have benefited and compensated by the strengthening of the US Dollars the past few weeks.Price is now steadying at US$67 a barrel and would dip further as more bad news come out of the global economy.
Below is what I wrote in my earlier article:
"With increasingly high unemployment in the developed economies, industrial outputs are going to plummet to a low level and consumption of energy would likewise follow.
As more people lose their jobs, businesses going into bankruptcies and reduction in global industrial outputs the demand for oil would show a sharp decline.Consumption would continue to decline as long as the global economy continue to shrink which is expected to continue well into 2009.With reduced global demand prices are expected to fall below US$50 a barrel before the year ended.
If the global recession become hard-headed and carry on without any sign of recovery than prices may even drop below US$30 per barrel by the first-half of 2009."
The oil-producing countries have had it too good and have been totally inconsiderate to poorer countries by demanding ridiculous price for their oil.
I believe crude price should stay around the US$50 per barrel, a reasonable threshold for both oil-producers and the rest of the world.
Anything more is extortion.