OPEC President: There is no "floor" for the price

Friday, October 9, 2009

There is no "floor" for the price for a barrel of oil, OPEC president Chakib Khelil said Wednesday as the price of crude tumbled under 45 dollars, its lowest level since February 2005.

"Prices can drop to a very, very low level, it depends on supply and demand conditions, inventory levels, and also the future of global economic growth," he said during an interview with Spanish public radio RNE.

Major productions cuts will be annouced, but will they really cut?

Word on the Pits:

"Oil prices will extend declines during the next 12 to 18 months if OPEC fails to implement “sufficient cuts” and supply stays at current levels", according to Christof Ruehl, the chief economist of BP Plc

“Most of the drop is due to speculators de-leveraging,” said Joan McCullough, macro strategist at East Shore Partners

“We won’t see the oil market rebound until either OPEC makes a substantial production cut or the economy begins to recover and we start to see demand for refined products firm up,” said Gene McGillian, an analyst at Tradition Energy

“It’s all about demand, demand, demand,” said Kyle Cooper, an analyst at IAF Advisors

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