19 December 2008
	Opec to cut savagely By Matthew Hill

Goldman Sachs predicted in May that oil could erupt through the US$200/barrel level by year end. It seems the bank might have accidentally added a zero to its figure, if a recent World Bank report is anything to go by. In a report released last week, the World Bank said US oil demand would drop this year and next, driving down prices. A barrel of crude would edge up to only $75 over three years. The World Bank's "Global Economic Prospects" report goes further. It says the global commodities bull run is over. The Financial Times says the US has not seen a two-year consecutive drop in oil demand for three decades, citing the county's energy department. According to the US energy department, average international usage for 2008 would be 85,75m bbl/day. Prices at about $40/bbl are culling producers' profits, which will likely lead to big production cuts. The oil-producing countries are expected to cut production by as much as 2,5m bbl/day when Opec meets on December 17. Opec decided to cut production by 1,5m bbl/day when it met in October. The group's members produce nearly half the globe's oil.