Today oil prices dropped to one of the lowest in 2006 at only fifty-seven dollars a barrel compared to July records of seventy-eight dollars and forty cents a barrel. OPEC (Organization of Petroleum Exporting Countries) ministers have agreed to reduce output by 1.2 million barrels per day. The change is expected to result in about a half million barrels per day of production taken out of the market. What concerns the OPEC ministers is high fuel stocks in consumer countries, particularly the United States. Also the demand for OPEC oil could drop in 2007 as their competition is brought online. The drop in prices in recent months has positively impacted consumer attitudes as well as spending in the United States. Businesses will benefit over the holidays with consumers focus not being on the money they are spending on gas.
Regardless of the current status, it seems to me that within the next few years, prices will inevitably increase again. It’s great that things are all “hunky dory” right now, but I think it would be prudent to put some money aside incase there was a sudden spike again.
The New York Times, Reuters Friday, October 20, 2006
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