An average per barrel price of $62.43 was observed over this past two weeks as declining demand, continued unfavourable economic news and a strengthening U.S. dollar all combined to impact global crude and refined product prices. The precipitous fall in crude values from a high of $147 in mid July has triggered corrective action on the part of OPEC which already announced a 1.5 million barrel per day production decrease and is currently contemplating further cutbacks. Weakened demand, as well, has generated discussion that, in the near future, some refineries in the U.S. may be mothballed as a result of deteriorated refining margins and declining sales. New York Harbour inventories are being minimized as declining prices, weakened demand and increased carrying costs play against traditional inventory management patterns. While the decreased value of the Canadian dollar has diminished our ability to take full advantage of lower global crude prices, declining input costs and related reduced rack pricing are contributing to a significant deflation of the region's petroleum prices.

• Citing a drop in North American demand by 5.7% year over year Sept 30th, the International Energy Agency dropped its 2009 forecast of average crude price from $110 to $80 per barrel.
• U.S. Energy Information Administration reported yesterday that “world real gross domestic product (GDP) growth will slow from about 4% in 2006 and 2007 to about 2.5% this year and 1.8% in 2009".

Industry analysts attribute same to weakened economic conditions.  While jet fuel prices are currently attractive, many airlines have already procured supply to the year's end by term purchase contracts and do not have the liquidity to store additional inventory.  The decline in diesel demand is most likely related to a deterioration in commercial and residential construction activity.