Production levels
March 11th, 2009 at 05:53am
Under China Oil+ Crude oil+ OPEC+ Oil+ Oil Price 2009+ Oil Price 2010+ Production levels
OPEC has more reason than ever to cut the oil productions. Will the oil cartel be able the push back oil prices again?
“A price of 75 dollars a barrel is fair for oil producers and consumers. This is said by Saudi Arabia last year, according to Bloomberg. With this in
mind is a further reduction of the oil production by OPEC this week is certainly not unlikely. With over 40% of the total world production is the power of OPEC
very big.
Since the Brent Crude Oil futures on July 11, 2008 set a record oil price of $ 147.50 it got in a free fall. On December 24, 2008 the oil price hit as low as USD36.20, a decrease of 75% in five months. It is therefore not surprising that oil producers benefit of oil production cuts. Since September 2008, the OPEC production is already decrease with 13%. The oil price is now stabilized, the crude oil futures move since early 2009 within a bandwidth of 39 and 52 dollars.
Market focus mainly on oil demand failure
The oil markets focussed in the past few months with more attention to OPEC and the production side. Traders look today way more to the demand side of the oil market. That is not crazy, given the recession in the U.S. The U.S. labor market figures on Friday March 6 to speak for it self. Unemployment rose to 8.1% in February 2009, the highest level in 25 years. Moreover the U.S. lost in the last quarter a small 2 million jobs, the fastest pace since 1939 when analysts began tracking the data. With one quarter of the global oil consumption is the demand from the U.S. very important.
The recession & financial crisis is for sure not limited to the USA only. For example, the World Bank stated that the entire world economy will show shrinkage for the first time since 1945. Proving the demand for oil is closely connected with the growth of world economy. The black gold is indispensable for transport, industry and many other sectors. If economic activity is declining, falling demand for oil is a logical trend you can expect. The International Energy Agency (IEA) are taking into account a decline in demand for oil in 2009 by 1.1% year on year to 84.7 million barrels of crude oil per day, even after a decline in 2008 0.4% 5. Two years of falling demand figures didn’t occurred since 1982/1983, says the IEA.
Where should an oil investor look out for?
The oil price is obviously determined by demand and supply at this moment. If OPEC again decreases the oil production, it can have a big impact on current oil prices. In the last few days we already could notice some upwards movements: the price of oil rose Monday in New York to the highest level in six weken. In the upcoming months, for each oil investor of today it is important to focus on the development of both demand as the supply side of crude oil. This week first – very cautious – Signs of recovery on the demand side were noticed. The U.S. business confidence ISM rose for the second month in a row. While China – the second biggest oil consumer in the world – takes an economic growth in 2009 8% in to account.
On the supply side are the current developments around OPEC of big importancy. Geopolitical tensions in Nigeria, Iran could influence worldwide oil markets. In time, the crisis could trigger higher oil prices says the IEA. The sharp drop in oil prices makes investing in new oil production capacity unattractive and can put the oil supplies in 2009 further under pressure.
By Oilism.com
February 20th, 2009 at 05:44pm
Under China Oil+ Middle East+ Oil+ Oil Price 2010+ Oil politics+ Production levels
From next year a lack of oil arise as the world economy recovers from the current deep recession.
This is said by the chief executive of the International Energy Agency (IEA) Nobuo Tanaka, he states that oil producers are investing too little in new projects with current market circumstances.
”The demand for oil is very low because of the extremely poor economic conditions. But if the recovery quick, likely first signals occur after 2010, we face a serious supply problem, if the investments do not increase’’said Tanaka.
Oil Projects
The members of oil cartel OPEC said earlier this month that they are disappointed, because of demand for oil thirty-five of all new oil projects are set on the long term.
Tanaka expects oil demand will grow next year by 1 percent, thanks to the recovery of growth in emerging economies like China and India. This year, the need for oil by the global recession is likely(for sure) lower than a year earlier.
Production
The chief executive of French oil group Total, Christophe De Margerie, warned Monday in the British newspaper Financial Times that oil producers already are near their production levels. Worldwide, the crude oil production is never higher than 89 million barrels per day. These are four million barrels per day less than he previously thought. The current demand for oil is about 84 million barrels per day. The IEA expects that the long term oil need for 2030 will certainly have grown to 100 million barrels per day.
Tension
According to De Margerie, the companies limited by the high cost of new projects, for example, in Canada and the continued political tensions in Iran and Iraq.
The current low oil revenues, according to him not only at the expense of new projects. They shall also ensure that existing projects are more likely to be stopped because it is too expensive they are longer in operation.
By Oilism.com
November 12th, 2008 at 05:55pm
Under OPEC+ Oil Price 2008+ Oil Price 2009+ Oil price+ Production levels+ energy prices
NEW YORK – Oil prices fell Wednesday to its lowest level in 22 months time. That was caused by speculation about a reduction in demand due to the deteriorating economic conditions.
A barrel of U.S. crude oil (159 liters) fell by 5.8 percent to 55.86 dollars.
The U.S. government gave an extra boost to speculations by downwards adjusting the forecast for global oil demand for 2009.
Oil Consumption
The U.S. Energy Information Agency (EIA) expects that consumption will decline slightly next year to an average 85.9 million barrels per day.
The demand in the United States, the largest buyer of crude oil in the world, will decrease with more than 1 million barrels per day. That is since 1980 not seen on the world wide oil markets.
OPEC
The Organization of Petroleum Exporting Countries (OPEC) told earlier this week oil productions will further decrease as the oil price continues to fall.
Last week, OPEC reduced production already with 1.5 million barrels per day, but the price of crude oil barely reacted to this production cut.
Last July, oil prices reached another record high of 147 dollars per barrel. Then the price plummet quickly followed by an OPEC production cut not long after that .
By Oilism.com
December 23rd, 2007 at 06:33pm
Under China Oil+ Crude oil+ Historical oil prices+ Middle East+ OPEC+ Oil+ Oil politics+ Oil price+ Production levels
The price of oil was well low at $25/barrel in late 2003 but jumped to double at whooping $60/barrel in the mid 2005. There was an uncontrolled change in the price of oil in most of times since 2005 to 2006 with some high and downs but settled at around $50-$60/barel in the early 2007. But this was not enough so it raised more above the price of $92/barrel in late 207 and ended up at about $99.29 in NYMEX futures in November end of 2007.
This clearly shows that oil prices has been increasing by passing years and the price tag of $100/’ barrel is clear to cross in the year 2008. Perhaps the price may increase above that if there are political conflicts in Middle East or any more OPEC production cuts. This uncertainty in the oil prices shows the indication of inflation of 1980 which was led to an economic recession. There are many philosophies that has attributed that US economic and political factors like UR-Iran conflict, North Korea Missile Launch, Israel- Lebanon crisis and decreasing US oil reserves are some determine factors of international oil prices.
There are many reasons to decrease in supply of oil that is main factor being increasing oil prices. The demands and supply policy of economics makes it true as if when ever the oil supplying countries like Iran and Saudi Arabia cut down the oil supplies then that is going to bring a surge in price in international market. The conflict in Middle East is the major reason behind this and even outside Middles East countries like Venezuela and other African countries producing oil have been facing local unrest like strikes and civil wars that has forced for decrease in oil supplies. Moreover the increasing terrorism by certain faction of people in oil rich countries has added to this price increase of oil.
A recent survey shows that the total supply of oil in recent times is 83 million barrel per day which is more than any other time in the history but the speculation that the a major Peak oil situation is nearing and a reducing oil supply is just in the near future has created a panic situation in the international market. Few secondary factors like OPEC supply cut and decreased value of dollar is too important reason for sudden increase in oil prices.
By Oilism.com
December 20th, 2007 at 05:30pm
Under OPEC+ Oil+ Oil Theory+ Oil politics+ Production levels+ peak oil
Peak oil theory or normally known as Hubbert Peak theory states that the future word production of oil with increasing in near years and again decline at the same rate until the reserves are exhausted. This Peak Oil theory suggest the way to find out the current reserves capacity and its duration to exhaust but it has also been disregarded as mere assumption because earlier theory on similar subjects could not state the real peak time and failed without any calculations. The theory tells that when crude oil reserves starts using the similar amount of water used to extract oil then that reserve starts exhausting and fails in near future.
This theory has been successful to determine the US oil peak time which led to a decline in oil production in United States in 1971. Since then, OPEC has been determining the oil prices in international market which had led to a major oil crisis in 1973. After the US reserves reached its peak many other countries to follow the trend including UK’s north seas which peaked in 1990, Mexico’s national oil company and China’s two major oil reserves are on decline. This has created a sudden decrease in international oil supply. But this has not created a huge panic situation because the recent finding of oil reserves in India and other countries has balanced the demand and supply of oil in markets.
It is actually very difficult to determine the time for peak of any crude oil reserve due to the unreliable accounting of oil producing countries oil reserves and uncertain production data. Some economist have said the years 1989,1995 and 1995 -2000 to be the major years of oil peak but those failed to prove because of unavailable data. Now some economist have a speculation that 2007 might be the peak year of oil and some years later for natural gas but this cannot be proven unless the reserves exhaust completely.
Whatever be the speculation of peak oil theory, the general idea is that crude oil is reducing in quantity, all around the world and unless an alternative solution is not found, the future of world remains slightly uncertain over oil prices.
By Oilism.com
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