According to India's Business Standard, global crude oil prices have dropped more than 33 percent since reaching record high prices in July.
Analysts are predicting that prices could continue falling below $90 a barrel as production remains steady and demand drops in many large consuming countries. In addition, the recent string of hurricanes to move through the oil-producing Gulf of Mexico did not do as much damage as expected.
This new trend is a reaction to the trend of the first half of the year. Between July 2007 and July 2008, Business Standard reported that oil prices doubled while demand for crude oil increased by only 2 percent.
"Oil prices now will be based primarily on demand-supply economics. That is why there has not been much fluctuation in oil prices despite Hurricane Ike," one securities analyst told the Business Standard.
Demand for oil is falling, not only as a result of earlier high prices and economic concerns in many countries. Global climate change and peak oil have pushed research into new and alternative fuel sources, which are slowly but surely becoming commercially viable. Many countries have set goals to significantly cut their oil use and oil imports over the next 10 to 20 years.
The International Energy Agency has predicted that oil demand in 2008 will be 86.8 million barrels per day while the market will be supplied with 88 million barrels per day.
Brazil's Petrobras has contracted its pre-salt finds
Brazil's state-owned oil and gas firm announced that it will contract to build 10 new offshore oil production platforms in its recently discovered pre-salt oil fields over the next eight years.
All 10 platforms will be built in ultra-deep water in order to reach Petrobras' new oil reserves, Xinhua reported. Petrobras announced its newest discovery, made in the offshore Santos Basin, Sept. 10.
The pre-salt field is nearly 143 miles offshore and more than 7,300 feet deep.
The first two units will be built by 2013 and 2014 by third-party companies. Each unit is expected to be capable of producing 100,000 barrels of oil and 5 million cubic meters of gas per day.
Petrobras will keep the other eight units, which are expected to be able to produce 120,000 barrels of oil and 5 million cubic meters of natural gas per day. Those eight platforms are expected to be operational by 2016.
Bahrain seeks to double its oil production
Under the country's current development plans, three international oil companies have been chosen as finalists out of eight for the development of Bahrain Field. Production from that field could possibly double the nation's oil production, Gulf Daily News reported.
The government will set up a joint venture with the company that is chosen, said Oil and Gas Affairs Minister and National Oil and Gas Authority chairman Abdulhussain Mirza.
The three competing companies are U.S.-based ExxonMobil and Occidental and Denmark-based Maersk. They will submit bids before the end of the year, and the winner of the contract will work with NOGA to set up the planned joint venture.
The new firm will operate and manage Bahrain Field's incremental production, which is currently 33,000 barrels per day.
Occidental is exploring in parts of the field, but Mirza suggested that once the contract is signed, production will significantly increase.
Closing oil prices, Sept. 16, 3 p.m. London
Brent crude oil: $91.95
West Texas Intermediate crude oil: $96.15