Oil Price Yo-Yo Continues
So the dance of the oil prices continues today with the Saudi’s saying they are planning on cutting production yet again. I still have dreams of a $29 barrel of oil this year and hope it comes true.
Oil prices edged higher Tuesday morning, after falling for six days in a row, amid reports that Saudi Arabia will aggressively cut production. Light, sweet crude for February delivery was up 36 cents to $37.96 a barrel.
Saudi Arabia, the world’s top oil producer, plans to reduce output even further than its previous target, according to published reports.
The kingdom has already lowered supply this month to 8 million barrels per day as part of OPEC’s agreement to reduce overall supplies by a record amount from Jan. 1.
Members of the Organization of the Petroleum Exporting Countries have been scaling back production in an attempt to put a floor under the rapidly declining price of oil.
“I think the Saudi’s are trying to single-handedly support the price of oil,” said Amanda Kurzendoerfer, a commodities analyst at Summit Energy, adding that the country is large enough to impact on oil prices. Still, the market remains concerned about weak demand for oil and gasoline as the global economy continues to deteriorate.
The price of oil lost more than half its value in 2008 and suffered a staggering decline of more than $100 a barrel from its peak last summer.
“The market is worried that the continuing global slowdown will have a negative impact on demand,” said Andrew Lebow, a broker at energy futures trading firm MF Global in New York.