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Sunday, January 25, 2009

Oil rises as Opec output reduced

Posted by Annie bimala

Oil worker in Bahrain
Opec agreed last month to cut output by 2.2m barrels a day

Oil prices have risen as hopes that the oil cartel Opec is complying with its production cuts outweigh new gloomy economic news.

US light crude added $2.80 to $46.47 a barrel. London Brent rose $2.98 to $48.37 a barrel.

Oil consultant Petrologistics estimated Opec production would fall by 1.55m barrels per day in January.

In December, the cartel agreed to cut output by 2.2m barrels a day as prices fell by more than $100 since July.

"I think this [Friday's rise] represents anticipation that the Opec production cuts are really happening after the Petrologistics estimates on January OPEC production," said energy analyst Tim Evans at Citi Futures Perspective.

"It seems that some of the strength [in oil prices] has come as part of a wider commodities rally," said Peter Beutel, president of Cameron Hanover.

Forecasts for cold weather in the US Midwest and the Northeast also supported heating oil prices, as the region is one of the biggest heating oil markets.

Oil prices were as low as $35 a barrel last week.

Global prices have fallen sharply since last summer as demand has weakened as a result of the economic slowdown.


BeyondGreen said...

This past year the high cost of fuel did serious damage to our economy and society. The trickle effects will be felt for years to come.The price of fuel affects every aspect of our economy from higher production and shipping costs to higher electric bills. Record numbers of jobs and homes were lost as a direct result. We are still reeling at the checkout lanes. We have spent billions in stimulus and bail outs. We need to bail America out of it's dependence on foreign oil. Create cheap clean energy, millions of badly needed green collar jobs and reduce our dependence on foreign oil. I just read the best book ever called The Manhattan Project of 2009 by Jeff Wilson. After a brief reprieve gas prices are on their way back up. OPEC has vowed to cut production until they achieve their desired 80-100. per barrel. It would cost the equivalent of 60 cents per gallon to charge and drive an electric car. The electricity to charge the car could come from solar or wind generated electricity. If all gasoline cars, trucks, and SUV's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. Oil is finite. We are using it globally at the rate of 2 X faster than new oil is being discovered. India and China are expected to put 3 million more vehicles on their highways within the next 20 years. We have so much available to us , wind, solar, hybrid technology and bio fuels. We need to invest in America. We need to get on with becoming an energy independent nation.

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