A new report in the Financial Times points to the continued weakening of oil prices caused by an overall flight from risky assets over the Christmas holiday. In related news, other reports indicate that Russia is facing its first budget deficit for 2009 in a decade because of these low oil prices, while another Kremlin aide points out the obvious – that the crisis is causing widespread unrest.
It’s hard not to feel a slight energy schadenfreude as OPEC experiences what it is like to be at the mercy of an unresponsive market.
From the FT:
By late morning on Christmas Eve, WTI was down 51 cents at $38.49 a barrel, while Brent crude was 60 cents lower at $39.76 a barrel.
The latest price falls came as bickering between oil producing nations intensified. The Organisation of Petroleum Exporting Countries suggested it may hold a meeting in January to discuss further production cuts after those announced in previous meetings failed to halt the slide in prices.
The cartel also called on Russia, the largest non-Opec producer, to deliver on its promise to reduce its output.
RobertLaughlin at MF Global said: “Opec ministers continue to attempt to propthe market up with promises of future meetings in January if required,but the market has already sown the seeds of distrust in a cartel thatnow vents its anger on non-Opec countries, blaming them for currentprice weakness.”