| « Many destabilizing factors continue for oil | The Challenge of 2009 - Taking Stock of Your Business During These Difficult Times » |
The spiral seems to continue
As the media continues to deliver more spine chilling reports of more layoffs, decline in GDP, employment, prosperity, and economic trade lasting from six months to a year; it’s clear we are in the early stages, and may expect the pain to continue through 2009. The world economy has checked into critical care and most government financial doctors have prescribed astronomical financial stimulus packages to revive employment, generate demand and nurture a hope for better times. By now, we all know U.S. President Obama signed a stimulus package of $US 878 billion, but even that received a negative reception from the stock markets. We suspect the market and investors are skeptical that the financial infusion will be enough to turn the economy around before the Fourth Quarter of this year. With crude trading below $40 US/barrel, 2009 has the oil industry facing a major challenge in repeating last year’s financial success. In 2008, the industry generated huge profits from high $160 crude, gasoline and diesel crack spreads. This year the industry is making marginal profits on crude.
By: Roger McKnight, Senior Petroleum Advisor