So, how will this affect the oil market, if at all: Oil Giant Angola Seeks OPEC Membership LUANDA (AFP) - Angola, sub-Saharan Africa's second largest oil producer, is seeking to join the Organisation of Petroleum Exporting Countries to reap the gains of being within the cartel, the government has said. "The council of ministers has said it backs Angola joining OPEC," finance ministry spokesman Bastos de Almeida told AFP Thursday. "By joining OPEC, Angola will no longer be excluded from the process of fixing quotas," he said, adding that the country also stood to reap tremendous financial benefits by joining the cartel. Economic analyst Mario Pavio said Angola's bid to sign up came an "opportune time as the global demand for oil, especially from countries such as China, is rapidly increasing." But he warned that negotiating Angola's quota could be tough sailing. "Angola needs to at least maintain if not increase production to finance reconstruction programmes," following a 27-year civil war which ended in 2002. Pavio said that Luanda also would have to "diversify the economy to reduce the crippling dependence on oil revenues." The southern African country, which includes the oil-rich Cabinda enclave nestled between the two Congos, currently produces 1.4 million barrels a day and aims to raise this figure to two million by the end of next year. A spokesman for OPEC said that it "welcomed" the prospect of Angola joining the cartel but said it had not received any official application. Omar Farouk Ibrahim said Angola's membership was unlikely to be raised at the next OPEC meeting in Abuja, Nigeria, on December 14. The request for membership was more likely to be dealt with in the first quarter of next year, following legislative procedures in Angola, he added. Angola's vast oil wealth accounting for 80 percent of revenues has already brought in huge riches, but critics say these have not trickled down, with more than 70 percent of Angola's people still living in dire poverty. In 2005, Angola had the second fastest growing economy in the world, with a gross domestic product ( GDP) growth rate of 20.6 percent, according to the International Monetary Fund. OPEC had in February this year held informal discussions in Venezuela on admitting Angola, Ecuador and Sudan. Saudi Oil Minister Ali al-Nuaimi had then said: "We welcome any producing and exporting country that wants to join. The more the better -- because we are a great organisation." On Sunday, Rafael Correa -- the winner of Ecuador's presidential elections -- said his country would seek to rejoin OPEC, saying: "Only united will petroleum producing countries be able to prevail" against the "world's hegemonic powers." Hordes of foreign oil firms have flocked to Angola, where new reserves are being uncovered at regular intervals. Economic growth is forecast at 15 percent this year while oil production is on track to reach two million barrels per day during 2007, narrowing the gap with Nigeria, Africa's top oil producer, which pumps 2.6 billion barrels per day for export. Angola's oil revenues for 2005 rose to 10 billion dollars (7.6 billion euros), up from 5.6 billion dollars a year earlier, according to the International Monetary Fund. Despite the oil wealth, the sprawling country ranks in the bottom 10 countries of the UN development scale. Angola has come under criticism over the way its oil revenues are handled, with human rights groups accusing the government of President Eduardo dos Santos of corruption and economic mismanagement. According to the US-based Human Rights Watch, more than four billion dollars (three billion euros) in oil revenues vanished from the state coffers between 1997 and 2002.
it won't affect anything anytime soon b/c Angola, as the article states, is focused on increasing its oil production, not restricting it as some members of OPEC are doing. Angola plans to keep expanding its production as much as possible even if they join OPEC, so I see no real impact on the markets. Plus, unlike many other OPEC countries that have nationalized oil industries, a substantial amount of Angolan production is actually being produced by international oil majors that will almost certainly push for production gains to justify their development costs.
Prices are lower than they've been since the summer of 2005, pre-Katrina and pre-Rita. Gasoline prices better be dropping as we speak. http://www.chron.com/disp/story.mpl/ap/business/4445199.html Oil prices drop more than $2 By LAUREN VILLAGRAN © 2007 The Associated Press NEW YORK — Oil prices fell more than $2 a barrel Thursday _ extending a similarly sharp slide a day earlier _ after the government reported that inventories of gasoline, heating oil and diesel fuel rose more than analysts expected during the last week of 2006. Warmer-than-normal temperatures for this time of year in the Northeast and Midwest have led to a buildup in inventories and, as a result, weaker prices. "There is no winter at all, thus we have a lot of supplies with no home and prices have nothing to do but fall," said James Cordier, president of Liberty Trading Group in Tampa, Florida. Light, sweet crude for February shed $2.67 to $55.65 a barrel in afternoon trading on the New York Mercantile Exchange. If crude closes near this level, it will be the lowest close since June 2005. On Wednesday, the contract plunged $2.73 to $58.32 a barrel, the biggest one-day drop since Aug. 17, 2005. Brent crude for February delivery fell $2.76 to $55.20 a barrel on the ICE Futures exchange in London. U.S. crude inventories declined last week by 1.3 million barrels to 319.7 million barrels compared with the previous week, according to a report by the Energy Information Administration. Analysts on average had expected crude stocks to rise by 930,000 barrels, according to a survey by Dow Jones Newswires. However, distillate inventories, which include diesel fuel and heating oil, increased by 2 million barrels to 135.6 million barrels as warm winter weather hurt demand. Distillate stocks were expected to increase by an average of 1.15 million barrels. Weather has become an increasingly important factor in the price of oil in recent years. A warm winter and a mild hurricane season last year have combined with a forecast for warmer-than-normal temperatures this winter to pressure oil prices. Demand for heating oil has been running 20 percent to 30 percent below normal for most of the past five weeks, said Man Financial commodities analyst Edward Meir, in a note to clients. Western states have recently seen snow and freezing temperatures, and two major snow storms hit Colorado last week. But Fadel Gheit, senior energy analyst with Oppenheimer & Co., notes that about 80 percent of heating fuel demand comes from the densely populated Northeast and Midwest, where temperatures have been balmy. Gheit said last week's snow storms _ which forced hundreds of canceled flights and road closures _ may have contributed to the decline in demand for gasoline and jet fuel. Gasoline inventories in the U.S. swelled by 5.6 million barrels last week to 209.5 million barrels, compared to analysts' estimate for an average increase of 1 million barrels. Jet fuel demand is down 8.1 percent over the past four weeks compared to the same period a year ago. The inventories report comes a day later than usual due to the New Year's holiday. Heating oil futures fell nearly 4 cents to $1.548 a gallon on the Nymex, while natural gas prices rose less than a penny to $6.165 per 1,000 cubic feet.
so funny, just a last week I saw an analyst predicting inventories weren't as robust as thought. now oil has fallen $5 in the last two days.
if you hadn't lost all faith in these "analysts" before, you have by now. did any of them get it right about where the price of oil was headed?
I think short term it will go lower as long as fears of the warm weather continue. But people are acting like it will never get cold again. And for oil to continue to go down too many things have to go right. The weather must be nice and sunny, no terrorist attacks, the middle eastern countries have to get alonng. Also they are expecting a large number of hurricanes this summer, that will also surely drive the price of oil up. Short term it will stay relatively low. But $65 is where I'm guessing it will be at 6 months from now. Of course if I'm wrong I'll have to commit suicide
But this is a mild winter. They forecast a mild winter. It's turning out to be. And they forecast an active storm season last year. And guess what happened? All the oil guys drove up the price waiting on the big one...that never came. Fears that never materialized. there have been terrorist attacks. see iraq. see the threat of terrorism in the UK. the middle eastern countries haven't been getting along. frankly, they never get along. It's all based on fear. As one analyst said at the beginning of last summer, (paraphrased) "there's no more room for fear in the price of oil. we're all tapped out. we've hit the peak of what fear can do to the price of oil at some point, it needs to be reality and not merely fear, or the market stops believing." and it did stop believing. big funds sold off. the bubble burst. in about 6 months time you saw the price drop by about 25%. the numbers you saw when we got up into the $70's were the outlying figures...not the norms. every market is subject to fundamentals. there are booms and busts in each market. bubbles burst all the time. oil guys seem to think this current market is immune to that. that baffles me. but they thought it before, here, and it cost us all a ton in Houston. and we haven't even begun to talk about the effects of an economic slowdown (or even the fear of one) in the US on oil prices. and that's all the Fed keeps telling us....they're just trying to buffer the fall.
I try not to make a habit out of betting against the analysts. Especially the ones with the slicked back hair and fancy suits.
Well, I don't trust anybody's assumptions except my own. I sort of agree with you though. Although oil is cheap now, analysts, investors, etc. will find a way to make it go back up. I don't think it is going to shoot up any time soon but they'll find a way to make it go up although there may not be a logical reason to do so.
i'm not sure it's cheap, now. cheap relative to where it was last summer, sure. but not anywhere close to cheap when you consider the last 5 years. this is a commodity, not an automobile. you don't have to go back very far to find the price of oil at or around $25/barrel. and yes, all of that was still post-9/11. and remember...this fall comes on the heels of OPEC telling us how they're tightening supply. we're supposed to be in the midst of their tightened supply right now. truth is, these guys make a killing at $40/barrel. the market keeps folks from actually defending a price that's too inflated. they can talk a big game, but they can't actually make it stick. there are sharply dressed experts in every market who will try to convince you there's no way to lose. that the market will keep soaring. you can see the internet's paper millionaires in the 90's as an example. they argued over and over again about how different their market was. that it really wasn't subject to the same fundamentals other markets were. but they found it was ultimately based on nothing. that's exactly what the soaring oil prices of the past few years reminds me of. all along the way it's, "prices will not drop...they'll only go higher...how long before we reach $100/barrel?? we'll be there but we'll never go back to oil at a price we once knew." but it was based on nothing but fear...unrealized fears that never materialized. just illusion. in my very short life experience, when that happens you can expect a bust.
There are a number of rumors flying around that I am trying to sort out, but I can assure you that this sell-off has nothing to do with the weather . . . just check the 5-year deferred price. The price of oil to be settled 5 years from now has nothing to do with warm weather today . . .
I meant cheaper actually. Well if a bust is what you're seeing in the future I hope you're right but I hope sometime soon we'll see more development in alternative fuels and away from oil-based energy that gives OPEC and its members the power that they have now.
i don't mean a total bust...but a significant slide..a bunch of which we've already seen. it's closer to $40/barrel now than it is to $77/barrel. it's come a long way. with gasoline overstocked, i expect to see cheaper prices at the pump this weekend.
Yeah, I didn't expect you meaning a drop in oil to $10 a barrel. This new storm system should make oil levels rise again though not significantly.
i read at least one analyst who said it was too little too late. that it might bring temps back down to only normal levels in the northeast. what i'm more interested in is what Rockets10 was talking about. he's suggesting that the drop has nothing to do with weather because even the longer-term contracts (5 years) are closing down. i don't know what's behind that.
this isnt good. if we have 1 dollar gas again then us americans driving habits wont change either which is bad for the long term. i was reading somewhere that for us to become more conscious of our driving and vehicle-type gas will ahve to be about 7 dollars a gallon.
