December 12th, 2007 at 03:57pm
Under Crude oil+ energy prices
The crude oil supplies decreased in the week of 7 December with 700,000 barrels up to 304.5 million barrels. This becomes clear from data of the American ministry of Energy. Analysts counted on an average increase of 100,000 barrels, so this figure was lower than expected.
The petrol and fuel supplies, of which an increase with 1.2 million barrels was forecasted, ended up stronger than expected with an increase of 1.6 million barrels up to 202.2 million barrels of crude oil. The supply stock of heating oil and diesel – decreased with 800,000 barrels up to 131.5 million barrels. Analysts counted here on an increase of 300,000 barrels.
Thereby the refining capacity decreased with 0.6 percent point up to 88.8%. Analysts counted on an increase with 0.1 percent point. All this rolled up together results in oil price above $95 a barrel in afternoon trade.
The latest interest decision of the Fed will probably not have much influence on the price of crude oil. According to analysts lower interest rates can prevent that the US economy heads up for a recession which stimulates the demand for crude oil. The USA are responsible for a quarter of the worldwide crude oil demand.
An interest lowering increases the pressure on the dollar and makes crude oil much cheaper for foreign currency holders. It is a plausible scenario that these buyers will drive the demand for crude oil further and with that the price a barrel.
In a monthly report the American Energy Information Administration (EIA) makes clear to expect the worldwide oil market will remain tight on demand/supply ratio in 2008. The monthly average crude oil price will come around $85.
Within the near future the EIA expects the worldwide demand for crude oil will grow more rapidly than the supplies outside the OPEC region. Thereby is expected that the decreasing supplies of crude oil will keep playing a major role in on the oil market the upcoming periode. Finally the EIA believes the consumption of crude oil will decrease with 1.4 million barrels per day in 2008.
Things to keep in mind for crude oil trading in 2008;
- Economic growth, how the credit crunch and housing crisis will impacts the growth and in the end the energy usage.
- Movement toward low mix of distillates and low emission and its impact on future demand for crude oil.
- The increasing refining capacity shows the limitations on crude oil supplies and the corresponding impact on gross refining margins.
- OPEC’s ability and willingness to provide the worldwide oil market with additional crude supplies.
- Cold Weather? Let it snow, let it snow……
- Worldwide tensions. For example; the rising nationalism in Venezuela and Russia, the Iraq war, the Iranian impasse over nuclear weapons and the Nigerian civil unrest can all have negative influence on the availability of crude oil supplies which is close connected to the crude oil price.
- Al Gore his Environmental Activism and its impact on future energy usage and the development and adoption of fuel and petroleum alternatives like bio ethanol.
By Oilism.com
November 25th, 2007 at 06:48pm
Under Crude oil+ Middle East+ Oil and gas+ Production levels
The price for a barrel crude oil has approached the 100 US dollar barrier.
During the electronic trade in Asia the barrier of 99 dollars was broken and a new record of 99.29 dollar was reached. Afterwards the price of crude oil fell something, but a poll position was sent for monday trade. Experts call the price increase of this moment exaggerated.
The increasing oil price coincides at this moment especially with the rate of the dollar, the currency in which crude oil is traded. The US dollar has strongly decreased the last periode. Check Dollar Drops for the latest USD currency exchange rates. Some analysts think however that the price increase of oil does not weights the decrease of the American currency.
Therby the price increase of crude oil coincides with an increasing demand for oil now the winter knocks on the door for Christmas. Weather analist expect harsh weather in the east upcoming winter. During last weeks OPEC meeting the decision was to increase the oil production capacity.
On this news the Januari future for a barrel crude oil closed Friday on the New York Mercantile Exchange 89 dollar pennies higher on $98,18. The previous record, of last Tuesday, was set on $98,03.
If we have a good combination of a further drop in US the dollar, geopolitical news and a considerable decline of the oil stocks, then we can hit the $100 for sure 100%, thus Jim Ritterbusch, president of Ritterbusch and Associates, in the United States.
By 0dmin
October 26th, 2007 at 11:31am
Under Crude oil+ Historical oil prices+ Oil and gas+ Production levels+ Uncategorized+ energy prices
As history demonstrates, energy prices have typically been high and volatile. Energy prices, particularly crude oil and natural gas can fluctuate by more than 60% from year to year. The past year has certainly been no exception to this volatility.
The average oil barrel price for October 2007 climbed by more than 30% in relation to May 2007.Today, crude oil prices hovering around $91 per barrel about 30% higher than one year ago and 5 years ago it hovered around the $20. That is a 450% raise within 5 years!!These are a direct consequence of a highly crude oil supply-demand curve and today’s drop in the US Dollar. Minor changes in supply or demand, even on the order of just a million barrels per day, can significantly impact the price of crude oil or a couple of cents off the US dollar exchange rates triggers non US countries to buy lot’s of barrels. This increasing demand will be followed by Supply concerns primarily arise from:
- Geopolitical instability. Instabilities in OPEC regions diminish production and raise fears about OPEC’s future ability to safeguard global energy needs. In addition, past movements in Nigeria, Bolivia, and Venezuela for local control of oil supplies have added instability to the marketplace couple of months ago. Nowadays the tensions in Turkey and Iran/Iraq play a big role in the sentiment on the oil market.
- OPEC’s hesitancy to increase daily production levels. Some fear that the Middle East fields have peaked, but others believe that OPEC maintains a tight supply to benefit from high prices.
- Crash or drop of the US Dollar to lower levels will impact the demand for oil which can cause a shortage on supplies and reserves.
- Insufficient midstream and downstream infrastructure to deliver increased oil and gas production in a timely manner.
- Natural disasters. Approximately 20% of the Gulf of Mexico’s oil and gas production was offline after Hurricane Katrina’s visit. Since much of this production was marginal, it may never come back online because of cost-prohibitive repairs. Global warming will cause more and more natural disasters in the near future.
Forecast: Oil keeps on Raising
With the continued instability problems in several parts of the world, the near future will likely bring continued high and volatile energy prices. Furthermore, adverse weather conditions caused by global warming and climate changes, experts predict more natural disasters on the magnitude of Katrina over the next several years. This could add several dollars to oil barrel prices. The U.S. Energy Information Administration expects average barrel prices to increase slowely over the next 12 months, yet other groups argue that this statement is too conservative. For example, investment bank Goldman Sachs anticipates a “super spike” in oil prices with potential surges to $105 per barrel. The bank also expects oil prices to remain high through the rest of the decade.
By Oilism.com