Oil Prices Slip Below $70 a Barrel

The rapid decline in prices had alarmed petroleum executives and oil producers who are becoming increasingly nervous that oil’s wild roller coaster undermines the stability of energy markets.

Oil prices have dropped sharply in recent weeks amid the economic crisis and lower consumption in developed nations. In New York, oil futures fell as much as 8 percent to $68.57 a barrel on Thursday, their lowest since June 2007. Oil has lost half its value since hitting a record closing price of $145.29 a barrel in July.

While not a quite rout, the precipitous drop undermines the elusive quest for stability that both oil producers and petroleum executives say they need to invest over the long term.

The concern now for both producers and petroleum executives is that the fall-off in prices could crimp future investments and reduce revenues. Iran’s oil minister, Gholamhossein Nozari, told reporters in Tehran on Tuesday, “I think the low price is a real damage to the future of production.”

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asr: these 2 paragraphs underline what oil producers & petroleum executives are arguing saying 'low oil price' are force us cut future investments as we have no guarantee of making profit in future ( if future prices are low) if we invest in future exploration at this high cost .
other hand , if we do not invest in 'future exploration , when economy turns to growth in future , there won't be enough oil , which leads to sharp price increases in future.
solution: estimate cost of future investment and have consumers pay for future oil price locked for next 10 years at $70, Exxon can take the gurantee option money '

From its inception more than a century ago, the oil industry has gone through countless up-and-down cycles, and oil companies have often under invested in periods of falling prices. The price collapse of the 1980s forced companies to slash investments and sparked a wave of mega-mergers through the sector.

But the industry’s retrenchment in the face of lower prices left the world scrambling for oil when demand from Asian and Latin American economies soared.

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Now, after nearly a decade of growth, the economic slowdown means there will be less demand for energy in the foreseeable future.