Surprising news on oil market – below USD 59 per barrel. Economic analysis by Info-Prim Neo

The price of oil decreased, on Wednesday, October 11 to the lowest level of the last eight months, while markets expected that the Organization of the Petroleum Exporting Countries (OPEC) decide upon a decrease of gross production. Evolutions on the stock markets were generated by both the traders’ estimations concerning an increase of fuel stocks from the USA, and the fact that OPEC members are still negotiating the decision concerning production’s reduction. Although the members of the organization practically agree upon the reduction, Saudi Arabia maintained the production without clearly expressing its intentions. As a result, on Wednesday, at the international stock markets the price of oil decreased by USD 1.44, reaching the price of USD 58.52 per barrel, registering the lowest price since February 16, foreign news agencies inform. OPEC representatives reached an agreement concerning the first reduction of the production since April 2004, by a million barrels per day. The debates concerning the day and modality of reducing deliveries blocked an agreement, so that the price of oil fluctuated between USD 58 and 63. Worries OPEC is responsible of producing more than a third of the world’s oil demand, and its member states are alarmed at the significant decrease of the oil’s quotation after July, when it reached the record estimation of USD 78.4 per barrel. On the other hand, specialists estimate that official data from USA will show a growth of 800,000 barrels at the oil stocks, an increase of 100.000 barrels for distilled products and a decrease of 500,000 barrels of gasoline reserves. Nevertheless, investors of the oil market are worried by the way leading economic powers will react about North Korea, which claims to have realized on Monday its first nuclear test, and Iran, which gave reason to understand on Tuesday that it will not stop its program of enriching uranium, despite the western states’ requests. Prognoses Asked to comment on the situation on the oil market, the chairman of OMV, Wolfgang Ruttenstorfer declared that the price of a barrel could reach USD 85-100 in 2007, after which for the next three-four years will be reduced to USD 40-50. "Oil Industry is a cyclic one. Our estimations show that in 2007 the price of oil could range from USD 85 to 100 per barrel, but we are expecting a decrease of the quotations three or four years later, to USD 40-50” asserted Ruttenstorfer. The price of oil is reducing, a fact which will determine the shortening of production by OPEC, a measure aiming at maintaining the quotations’ level, mentioned the head of the Austrian group which owns the Romania-based Petrom Company. The chair of OPEC, Edmund Daukoru, declared recently that the member-states reached "more or less", a consensus concerning the reduction of the oil production by a million barrels a day as soon as possible. Evolutions on the internal market Local experts claim that evolutions on the international market will not produce serious effects on the national economy. At the same time, they specify that it is too early to talk about a serious cut of oil prices. The head of the Business Consulting Institute, Mihai Roscovan, affirms in a press statement that “we could benefit just from some insignificant decreases in price of petroleum products, and that’s all. This is because after world markets knew a decrease of prices by 25 – 30%, in our country gasoline and diesel oil cheapened by 1-2%.” Oil companies from Moldova, at the moment, do not make any declarations in what concerns the evolution of prices on the national market.