West Texas Intermediate rose to US$47.26 in overnight trading according to bloomberg.com. It finished Tuesday in New York at US$46.96, the first time below US$47.00 since May 2005. WTI is the futures price most often cited by news media.
80% of the world's light sweet crude - including Newfoundland and Labrador - is measured against Brent a North Sea blend which typically trades below WTI. It finished Tuesday trading at US$45.44, or about $56 (Canadian) with a 25% exchange rate. Overnight it climbed to US$46.00.
OPEC will reportedly cut production at its next meeting looking to get oil towards OPEC's target price of US$70 a barrel. So far, OPEC has proven to be spectacularly unsuccessful at controlling the world price of oil.
Attiyah reiterated that a price of under $70 a barrel was threatening to derail projects to boost oil and gas capacity. Oil has stayed below $70 since Nov. 5.
"My concern is that the oil price will go lower," Attiyah said. "And many projects will be delayed."
OPEC's most influential member, Saudi Arabia, said at the weekend that oil prices needed to return to $75 to keep the more expensive projects at the margins of world supply on track. Other OPEC members, such as Nigeria and Kuwait, have supported the Saudi view that $75 is fair to both consumers and producers.
Evidently OPEC hasn't been getting those memos that oil will return very shortly to the US$70 to 80 a barrel range or others that predict it will head back to US$100 a barrel sometime in 2009.
Meanwhile, in Newfoundland and Labrador, Premier Danny Williams told the legislature that his government would continue to do as it has been doing all along, using public money to stimulate the economy as long as it isn't to the point of overheating.
We are spending as much as we can to stimulate the economy without overheating the economy, and making sure that we get the best bang for our buck, and we will continue to do so.
Williams, who last week told reporters he is reading everything he can get his hands on in an effort to understand what is going on in the world, evidently forgot to read his own budget forecast.
Far from overheating, the 2008 budget forecast the economy would shrink by 2% in 2008. This was a deliberate low-ball since private sector economists had instead forecast very modest growth of less than one percent.
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