Can OPEC Stop the Slide in Crude Oil?
Oil prices gyrated wildly in 2008, hitting an all-time high above $147 a barrel on July 3rd, before skidding to a four-year low of $35 /barrel six months later, sounding off alarms bells from Moscow to Tehran. After the collapse of Lehman Brothers, crude oil tumbled below $100 /barrel, and OPEC pledged to cut its collective output by 2-million per day (bpd), – a pledge that wasn’t fully implemented until two months later, after the price of West Texas Sweet had already crashed to $40 /barrel. On Nov 9th, Iran’s Oil Minister Mohammad Ali Khatibi said the economic downturn had shaved 3-million bpd from global crude demand. “In the short-term the crisis is affecting demand. But in the medium term this will affect supply,” he warned. “Current prices are too low to encourage investment in the Canadian oil sands and in expensive oil projects in the deep sea, such as in Brazil,” he added. On Dec 17th, OPEC agreed to a larger-than-expected 2.2-million barrel cut in its daily oil production, to
