Oil prices continue on a see-sawing trend

Sadly, it is as I predicted last week - the bump from Barack Obama's inauguration wasn't nearly enough to pull the US economy up by its bootstraps.

And now I fear the worst is happening. Oil has dropped down to $47 (Dh172.86) as the recession continues to ripple across the world, despite remaining stable for the last few weeks.

I was verging on hope there for a moment, as gasoline prices in the US jumped almost seven cents this past week, despite the Organisation of Petroleum Exporting Countries (Opec) continuing to squeeze supplies.

Everything continues to lean towards a scenario that would force Opec to continue cutting supplies, resulting in upwards price lash-back down the road.

Frankly, price predictions are now hovering in the $35 to $40 per barrel of crude range.

As I've said repeatedly, I think this as far below where the price should be as $140 was above. Well, perhaps not quite that desperate, but darned close.

It is going to be hard to assess the impact of the economic stimulus plan that President Obama and crew are putting together, especially since there is still some opposition to its hefty $825 billion price tag and many details have yet to be released.

But any stimulus is going to come a little late, as each week brings a new round of layoffs by major US companies.

A partial list alone is cringe-worthy: 5,000 jobs gone from Microsoft; 1,100 are leaving famed motorcycle manufacturer Harley-Davidson; oil major ConocoPhilips sliced off 1,300 jobs; and rumours are circulating about cuts at IBM, Hewlett-Packard and Starbucks.

We all know crude is looking more like black tar than black gold these days. Just keep in mind, it isn't simply Gulf nations with oil reserves that are currently feeling the pinch in their pocketbooks.

In New York last Friday, natural gas prices hit their lowest level since 2006, at $4.518 per million British thermal units. That is down 20 per cent this year and a hefty 67 per cent from 2008.

On the surface, that is pretty dismal news for Qatar, which has massive natural gas reserves but almost no crude.

But surprisingly, there is the potential for some pretty smart energy development here.

The nation is working on creating a new market for its natural gas - Qatar Airways announced that it is hoping to have its aircraft engines certified to run on gas-to-liquid (GTL) kerosene by the end of this year.

Working with Rolls-Royce and Airbus, the nation is hoping US and European aviation authorities to get the fuel approved, since it requires no engine modifications.

Because they produce substantially fewer by-products, GTL fuels are considered far cleaner than traditional jet fuel.

Sure, they aren't renewable. But since Qatar sits on top of a hefty 15 per cent of the world's natural gas reserves, creating a cleaner alternative to crude-based fuels could play well for the tiny nation if crude oil prices jump as production shrinks.

Qatar has already invested billions in two GTL projects, in an attempt to turn itself into the global hotspot for the fuel.

Their Pearl GTL plant, a joint project with Shell, is set to start producing in late 2010, and the country is shooting to be the world's leading producer of the cleaner fuel.

It may be the hottest thing in the Gulf soon.

- The writer is a freelance journalist based in Alaska, USA.