In an increasingly volatile market in which assets have been consistently tumbling, commodity prices have plunged to a new low of around $89 a barrel from record highs that topped out at more than $147 a barrel in July. The plummeting price has sparked concern among members of OPEC, with some leaders citing that the oil cartel should meet in November, a month ahead of the scheduled date in December.
Crude Prices took a steep fall Oct. 8, 2008, after the U.S. Energy Information Administration reported that U.S. crude oil inventories had increased by 8.1 million barrels for the week ending October 3. Inventories rose from 294.5 million barrels to 302.6 million barrels throughout the week, according to the EIA report.
U.S. companies, such as ATP Oil & Gas, have reacted to the financial instability by reducing capital expenditures for the fiscal year 2008 to 2009, the aftermath of which will take a toll on future production.
"Based on the current economic and financial climate, we believe it prudent to reduce our remaining capital expenditures…[which] will impact production in the latter part of 2010 and beyond," explained ATP's CEO, T. Paul Bulmahn, after ATP announced its significant $200 million capital expenditure reduction.
While commodity prices and demand continue to decline, OPEC may soon cut oil supplies to prop up the market, which could further impact oil prices in these tumultuous times of price dipping and rising.
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