fundamental factors, such as the flow fo speculative investments into commodities. Today we meet in London at the opposite end of the price spectrum; the price of oil has plummeted by more than $100 to under $50 per barrel in just a few months. Lower prices are a testament to worsening economic and financial conditions experienced of late. To illustrate, global oil consumption for this year, which was projected to increase by 2 million b/d/ with anemic growth anticipated next year. However, I continue to believe that non-fundamental factors continue to impact oil prices, both upwards and downwards. To illustrate, consider the rapid and substantial financial deleveraging which has resulted in sharp price declines not just for oil and commodities, but for nearly all financial instruments. The instability and volatility in oil markets hurt everyone, from producers to investors to consumers. For producers, today's price levels are wreaking havoc on the industry and are threatening current and planned investments, atop impaired funding markets which have reduced credit availability and raised funding costs. Not surprisingly, a number of upstream and downstream projects have already been cancelled or delayed. For consumers and investors, a high degree of volatility dents confidence and sends mixed signals about the future. And finally, emerging economies reliant on exports and external financing will be hurt by low prices. --More
