Oil Price Records Historical Biggest Decline

Historically, some analysts said that the latest $9 decline in oil price is said to be the biggest decline for 17 years of oil trading. The decline was due to snailed-pace US economy as it reportedly needs to lower its oil demand from the world oil markets.

The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War.

But in 1991, oil was trading at just $32 a barrel, so the more than $10 slide in dollar terms represented a record 33% drop. Oil fell 4.4% Tuesday, which does not even crack the top 100 price declines in percentage terms.

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Iran Ranks 10th in Per Capita Oil Income in OPEC

According to US Energy Information Administration, new data revealed that Iran is among the 13 OPEC members that ranked number ten when it comes to per capita oil income. Behind Saudi Arabia and UAE, it has the third largest oil income in the first half of 2008.

Iran's per capita oil income for the first six month of 2008 was $816, about one third of the average per capita oil income of $2,172 among OPEC members.

Qatar, with a per capita oil income of $28,136, is at the top of the OPEC member list followed by Kuwait and the United Arab Emirates, with per capita oil incomes of $20,807 and $13,208 respectively.

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Oil Settles Above $145, OPEC Expect Lower Demand

Oil price did not climbed higher, yet it remained at above $145 per barrel in the world oil markets. Meanwhile, OPEC is expecting a lower demand of oil in the oil stock market, despite prediction of $8 increase in petrol.

Tensions flared up in the Middle East as Iran test-fired missiles this week, including one type capable of reaching Israel. The U.S. Secretary of State Condoleezza Rice warned on Thursday that the United States will defend its allies, and Iran responded with another missile launch.

Nigeria's main militant group said on Thursday it would resume attacks in the country's oil-rich region. Traders are concerned that the crude production will be disrupted in Africa's largest oil exporter.

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Oil Price Hike Brings Fears on Food Crisis

The alarming oil price hike has definitely created tension on food crisis, as it recorded a new record nearing to $141 per barrel. If an ordinary citizen cannot anymore afford to bear the current oil price, how much more of the food he eats? What does OPEC do to resolve this problem?

The energy markets have been seriously rattled by comments from a top Pentagon official warning that Tel Aviv may launch raids on Iran's Natanz nuclear facilities to pre-empt its acquisition of Russian air-defence missiles.

The source told ABC News that Israel would not wait until the Ahmadinejad regime had accumulated enough enriched plutonium to make a bomb. "The red line is not when they get to that point, but before they get to that point," he said.

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Oil Is Staying High

International Energy Agency's monthly report said that consumers should not expect relief from the present sky-high oil prices. Will oil price continue to soar?

That means the balance of growth has to come from OPEC, which has been unable and/or unwilling to increase capacity fast enough in recent years to keep up with increases in demand. In fact, OPEC's spare capacity—the extra crude it could produce if necessary—has dwindled back below 2 million barrels per day for the first time since the third quarter of 2006, the IEA says.

That will likely make the hair-trigger markets even more sensitive to potential outages that could be caused by hurricanes on the U.S. or Mexican Gulf Coast, or political tensions from Iran to Nigeria. "Higher prices are needed to choke off demand to balance the market," the IEA said. On cue, U.S. crude, which had declined on June 9 following the June 6 record of $139.12, rose by 2.26%, to $137.00 per barrel, Reuters reported.

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Oil Price Slides Sharply to $127

From above $135 a barrel last May 22, oil prices have sharply slid back to $127 a barrel as OPEC officials still claiming that there is no need to pump more oil in the world oil markets. Will the lowering oil price support OPEC's claim?






With global stock markets weak, some investors also see better potential for gains in the oil market. Speculative buying has been cited as a major reason behind oil's more than doubling its price in a year.

"As an asset class, oil has performed better than stocks and bonds. Money always looks for better returns," said Shum. "Until global equities turn better, oil demand collapses or supplies increase significantly we're not gong to see a substantial drop in oil prices."

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Indonesia Plans To Pull Out OPEC Membership

Indonesian government is reluctantly planning to quit its membership from OPEC. Is it because of the not-so-good oil markets today or is it because OPEC is not anymore doing its part to maintain the oil price?


As domestic consumption rises and international prices are kept at high level, Indonesia has no choice but to re-discover its abundant oil and gas riches.

To quit OPEC may be a wake-up call for Indonesia to improve investment, upgrade poor infrastructure and reform its weak legal system and red tape to absorb more foreign investors.

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$200 A Barrel Is Possible, Oil Producers Say

Oil price is at above $135 per barrel in early trading today, which escalates tensions and fears over supplies. The price becomes double as last year's price. Meanwhile, oil producers predicted that oil price may end up $200 per barrel this year. how would OPEC react on this issue?

The US has repeatedly called for oil-producing countries to raise output to calm the market but producers blame speculators and the weakness of the dollar for high prices, rather than supply constraints.

Abdullah al-Badri, Opec secretary general, said the cartel saw no problems with the fundamentals of oil supply and demand. "Even if we increase output tomorrow, the prices will not come down."

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