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Energy Blast – Dec 11th, 2008

Falling oil prices have led to Russia posting its first monthly budget deficit this year, whilst falling oil production is threatening the BTS-2 pipeline, a Transneft project that many say is being built for ‘political rather than economic ends‘.  It is thought that a $15 billion US rescue plan for its automakers may have contributed to the price of crude oil rising above $44 a barrel.  Other reports suggest that the rise is due to yesterday’s speculation that Russia would join with Opec to cut production, a move which was confirmed today but which could take ‘at least four to six weeks to have any impact‘.  Energy Minister Sergei Shmatko says Russia is prepared to give political backing to LUKOIL’s bid for Spain’s Repsol should the country’s largest private oil company ask for it.  Serbia is poised to sign three oil and gas deals with Gazprom.