I was drinking my morning cup of coffee & thinking about why oil is dropping.
I have studied what Russia has been doing to get price under control. They have launched investigations into price gouging all over the country.
Russia’s Prime Minister Vladimir Putin threatened to ouster chiefs of the Federal Antimonopoly Service (FAS) if they fail to promptly sort out the problem of monopoly on the jet fuel market. According to Putin, the way out is construction of alternative fuel and filling facilities, while the analysts predict that the cost of fuel in Russia will be growing along with the increase in crude oil prices.
Moscow has been saying all along that oil should be around $130 a barrel. So Moscow is supporting a smaller price per barrel….
“I believe the prices will level off at $120-130 per barrel,” Sergei Kukura, LUKoil’s first vice president, said on the sidelines of an investor conference in Moscow.
“We consider $130 per barrel to be a fair price,” the official added
I would say $130 a barrel is a fair price, lets hope it drops a little more and becomes more fair!
The Saudis are upping production so that the price will slip back down to appease the World. Let the price get too high and the World will turn to other energy sources. The Saudis are masters at the oil game. The headlines are …..
Great News: On the New York Mercantile Exchange, crude oil prices fell $3.37 Thursday to $129.92 per barrel, as analysts worried the weak U.S. economy has forced demand to fall.
Now the world rejoices over $130 a barrel oil. Even if oil drops to $100 dollars a barrel the oil companies are happy! Remember only one year ago oil was less than $75 a barrel. 5 years ago oil was around $50 dollars a barrel.
Lets not forget that the USA is not the only player in the game.
Saudi / USA Relations: Surging prices, along with a weak dollar and an oil-thirsty Asia, have blunted America’s leverage with the key oil producer and helped sour the two nations’ relationship. Saudis have other big friends also….
I know that I am not happy about fuel prices: I remember the first time I filled my car up as a teenager. I paid 18 cents a gallon! (Remember: Gas Wars!) Then I remember how terrible it was when gas went to 40 cents a gallon. (I thought my life was ruined.)
We live in a Oil Addicted World!
So oil price will drop but it will never return to allow the price of my first gas tank fill up…..
Kyle & Svet
comments always welcome.
Windows to Russia!
- Oil rises above $82 amid weaker US dollar (sfgate.com)
- Drumbeat: October 11, 2010 (theoildrum.com)
- LUKOIL sees output decline in Russia, up abroad-VP (reuters.com)
- Russia may raise oil export duty to $289-$292/ T in Nov (reuters.com)