News

December 28, 2009

After A Tough And Challenging Year The Oil Price Still Closed Out Above US$70 A Barrel -- High Enough,Many In OPEC Feel, To Start The New Decade With Optimism

By Eithne Treanor

It’ll be remembered as one of the toughest years in recent history, or at least since the great depression. Profits of oil companies and producers were down, but the oil price held steady most of the year. Economic indicators were not looking good at the beginning of the year and the world was steeped in recessionary mode. The oil price was below US$50 a barrel in January 2009 but it gradually found a sustained upward path thanks mostly to OPEC’s strategy and compliance and the market managed to balance out above US$70 at the end of the year.

In the midst of this global recession, high inventories and slowing oil demand growth, OPEC’s first meeting of the year was in March. OPEC decided to monitor compliance of existing production rather than take any oil off the market. The OPEC Secretary General, Abdalla Salem El-Badri said he was confident that the 4.2 million barrels a day cut put in place at the end of 2008 was sufficient. The state of the global economy was a concern shared by all ministers. “We have to deal with this crisis...