Atlantic Council

Four months after the hot phase of Russia’s war on Georgia, Russia continues to violate the European Union-brokered ceasefire agreements of August 12 and September 8.  Notwithstanding, the EU on December 2 resumed Partnership and Cooperation Agreement talks with Russia, which it had suspended September 1 in the wake of Russia’s August assault on Georgia. 

The International Energy Agency (IEA), in its World Energy Outlook for 2008, says the price of oil may move back to $100 per barrel. According to the energy body, it could even soar as high as $200 a barrel by 2030, reports the BBC. The immediate risk to supply, it says, is not one of a lack of global resources, but because of a lack of investment in certain areas and oilfield

The world, the report's authors conclude, is not running out of oil just yet - indeed, there is enough of it to supply the world for more than 40 years at current rates of consumption. But, they point out, field by field, declines in oil production are accelerating and more money will be needed in research and development to extract the oil there is. While world oil supply will rise, the report's authors predict that massive investments in energy infrastructure will be needed - indeed a staggering $26 trillion dollars up to 2030. This is not to mention the report's stark warning about the consequences of increased greenhouse gas emissions.

Highlighting a fall in sales of petrol and other refined fuels, U.S. light crude fell as low as $66.73 a barrel, its lowest point since June 2007, according to BBC. U.S. light crude finished the day's trading down $5.43 to $66.75. Brent crude, a benchmark for oil prices, fell $5.20 to $64.52 a barrel, after earlier touching $64.59, also a 16-month low.

Oil producers group Opec is due to cut output on Friday to help lift prices. Despite Opec's expected reduction in production, oil analysts said crude prices could fall as low at $60 as signs that the world is heading for recession continue to grow. Oil hit an all-time high of $147 a barrel back in July, but has since fallen back steadily.

The crisis on Wall Street drove oil prices down 4% to their lowest in seven months on Tuesday.  The Reuters-Jefferies CRB index, a benchmark for raw materials prices, was down to its lowest since January amid predictions that the demand for commodities and global economic slowdown would impact consumer and trader spending.  The Financial Times reported that West Texas Intermediate crude, the US benchmark, was down $3.92 to $91.79 a barrel.

It may be the ultimate irony of our horrendous energy predicament. Amid all the talk and admonitions about “foreign oil” and alternative energy, it appears the Saudis and the other Persian Gulf oil and gas exporters are further along in preparing to diversify their economies for a post-petroleum world than the United States.

OPEC has decided to cut the production of oil by 520,000 barrels a day within the next 40 days after talks in Vienna, reports the BBC.  News of the reduction caused a rise in oil prices towards $104 a barrel, after months of decline. Oil prices have sunk from a record high of $147.27 a barrel in July - a 30 per cent decrease. Production among members will amount to 28.8m barrels a day. This exlcudes Iraq and Indonesia: the latter having requested to suspend its full membership of OPEC.

OPEC's President Chakib Khelil said oil ministers will maintain current levels of production despite a 30 per cent decrease in the price of oil since last July's high of $147.27 a barrel, reports CNN. OPEC leaders are meeting in Vienna on Tuesday to discuss the situation, as oil descends towards the $100 a barrel mark. Global economic slowdown and higher production among OPEC member countries has led to a drop in the price of crude.

Depsite this, Saudi oil minister Ali Naimi told the Financial Times that, "The market is fairly well balanced and we have worked very hard since June’s meeting to bring prices to where they are now."

BP has signed a memeorandum of understanding to ends its dispute with Russia's TNK-BP.  The current boss, Robert Dudley, will step down and three independent directors will be appointed to the board.  Additionally, "BP said it had agreed to offer a Russian-speaking candidate for the post, with extensive Russian business experience," BBC reports.   The joint venture accounts for 25 percent of BP's profits.

 A "growing cohort of legislators in the ruling Labour Party" is calling upon Prime Minister Gordon Brown to support a windfall profix tax on energy companies to subsidize fuel for the poor, Mark Rice-Oxley reports for The Christian Science Monitor.  While "at least 80" MPs have signed a petition, the measure remains highly controverial: "Critics say it's a subversion of the very idea of a capitalist market system and point out that no other industry is punished this way. Nor, they say, is Big Oil bailed out when oil prices tumble."