End of The Crisis
By the beginning of September 2008, prices had fallen to $110. OPEC secretary Abdalla El-Badri said that it intended to cut output by about 500,000 barrels (79,000 m3) a day, which he saw as correcting a "huge oversupply" due to declining economies and a stronger U.S. dollar. On 10 September, the International Energy Agency (IEA) lowered its 2009 demand forecast by 140,000 barrels (22,000 m3) to 87.6 million barrels (13,930,000 m3) a day.
As many countries throughout the world entered an economic recession in the third quarter of 2008, prices continued to slide. In November and December, global demand growth fell, and U.S. demand fell 10% overall from early October to early November 2008 (accompanying a significant drop in auto sales).
In their December meeting, OPEC planned to reduce their production by 2.2 million barrels (350,000 m3) per day, though they admitted their resolution to reduce production in October had only an 85% compliance rate.
Petroleum prices had fallen to below $35 in February 2009, but on 6 May 2009 had risen back to mid-November 2008 levels at about $56. The global economic downturn left oil storage facilities with more oil than in any year since 1990, when Iraq's invasion of Kuwait upset the market.
As of May 2011, the price of U.S. WTI crude reached $113, while Brent crude, more indicative of world price due to a supply glut at Cushing Oklahoma, reached $127 a barrel. After several weeks of fluctuating between rising and falling prices, protests in the Middle East and North Africa drove prices up. Although prices were beginning to ease with the calming of the revolution in Egypt, prices spiked to $100 for the first time since September 2008 with the 2011 Libyan civil war.
Read more about this topic: 2000s Energy Crisis
Famous quotes containing the word crisis:
“One theme links together these new proposals for family policy—the idea that the family is exceedingly durable. Changes in structure and function and individual roles are not to be confused with the collapse of the family. Families remain more important in the lives of children than other institutions. Family ties are stronger and more vital than many of us imagine in the perennial atmosphere of crisis surrounding the subject.”
—Joseph Featherstone (20th century)