I was told that we can expect a gas price reduction end of this month. Oil price dropped to below USD70 (USD69.85 to be exact) a barrel - for the first time in 14 years. So, if this holds up or should the price go down further, looks like our (Malaysian) current price per litre of RM2.30 may be reduced.
Oil prices peaked at $145.29 a barrel in July but have since been falling as oil consumption has slowed significantly in Western countries as people take public transport and drive less or for shorter distances.
As consumers pay less to fill up their tanks resulting from less usage, the decline in oil prices could provide a form of stimulus to the economy. Some analysts expect oil prices to keep declining, perhaps to as low as $50 a barrel in coming months.
What triggered the decline in oil price was a U.S. government report showing domestic crude oil stockpiles that rose more than expected as Americans use less oil.
Oil producers are now seeing a problem with the drop in prices. According to Deutsche Bank estimates, Iran and Venezuela both need oil prices at $95 a barrel to balance their national budgets, Russia needs $70 and Saudi Arabia needs $55 a barrel.
Global oil demand is undeniably slowing down, particularly in developed nations. Japanese oil consumption tumbled by 12 percent in August over the same month a year ago, while in the United States, demand fell by 8 percent in September.
Consumption is still growing in developing nations, however, but at a slower pace than in recent years.
Oil is a depleting commodity. Perhaps this reduction in usage could be what we need - to stretch its availability.
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..Oil Prices Slip Below $70 a Barrel