Oil : new record and Indonesia could quit OPEC

It’s getting worse : crude oil set a new record yesterday in Asia at 120 USD per barrel… And Indonesia said it could quit OPEC…

It’s not a secret anymore : Indonesia was an exporter of oil… But not anymore. The country is a net importer now.

Our wells are drying” said the indonesian president, “adding that the country needed to concentrate on increasing domestic production, which has dropped to less than a million barrels a day. “That could take one to three years.” (IHT)

Peak oil production + higher demand = prices going up.

We can blame the uggly speculators, the weather… whatever… we are looking at the harsch reality.

The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,” the Goldman analysts wrote in the report dated May 5.

Global fuel demand growth is outpacing gains in output. China, the world’s fastest growing major economy, has more than doubled oil use since New York crude dropped to this decade’s low of $16.70 a barrel on Nov. 19, 2001. That’s soaked up most of the world’s spare capacity amid supply cuts in Nigeria, Iraq and Venezuela. (Bloomberg)

The outlook for Thailand, and most of the asian countries, is not good. Read my article about the Oil Intensity that makes the country vulnerable.

2 Responses to “Oil : new record and Indonesia could quit OPEC”

  1. 1 Patiwat 7 May 2008 at 3:34 am

    a major factor in that is that oil is pegged by the USD… the more USD devalues the higher the oil prices will be.

  2. 2 thaicrisis 7 May 2008 at 7:45 am

    Correct. But like the “speculation” I think it’s a secondary factor.

    You will notice that since 2 weeks the USD took back some ground (versus Euro but also versus Yen)… And prices of crude oil continue to go up.

    “our wells are drying”. That’s the key word.

    Indonesian wells start to dry, like Mexico, like north sea, like many other countries.

    It will happen to the middle east too. It’s unavoidable.

    Sure it will take time. But that’s not the point. We will always have oil… the problem is a what price.

    Cheap oil area is finished.

    And expensive oil is going to create a lot of problems.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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