Oil Industry: At Global Crisis

Oil peak will surely damage businesses and bring out detriments to all who depends on it. Oil price is a real shocker!


The historical upward trend in oil price has inflicted pains, headaches and economic worries on every consumers. After some decades have passed, since the conception of the oil industry in Middle East, cheap oil is a history. But what makes it unbearable today? Last year's oil price was only at $65 per barrel, today, it is more than a double, making it a new record of $165 per barrel and also expected to escalate at $200.


Pessimists believe that production has passed its peak. Optimists say it may be 20 years or so away – which would give us some time to prepare – but are now muted. Last week the hitherto optimistic International Energy Agency admitted that it may have overestimated future capacity. Chris Skrebowski, editor of 'Petroleum Review' and once an optimist himself, believes that the world is now in "the foothills of peak oil". Prices may ease a bit over the next few years, but then the real crunch will come. The price then? "Pick a number!"

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Oil Price Retreats From $126/Barrel

From last week $126.96 a barrel due to weak dollar, oil price is getting its way down, this time, is due to a strong dollar.

The advance at the end of last week came after Colombia said it recovered documents from a slain guerrilla that indicate Venezuelan President Hugo Chavez has offered assistance to Colombian rebels. Some U.S. lawmakers have cited the documents to argue that the White House should add Venezuela to a list of state terror sponsors that includes North Korea, Iran, Syria, Sudan and Cuba.

"We see this as having continued upward pressure on the demand for oil world wide", cited a senior trader at Global Options, one of the largest commodities traders.

Such a move would most likely spur Venezuela to cut off oil exports to the U.S., but analysts believe such a provocative diplomatic step is unlikely.

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