the oil market
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The Oil Market. Terms in the Oil Market. OPEC – a cartel of countries that join together to make decisions regarding the supply of oil in the world market - PowerPoint PPT PresentationTRANSCRIPT
OPEC – a cartel of countries that join together to make decisions regarding the supply of oil in the world market
GDP – the dollar market value of all the goods and services produced in a given economy in a given time period (a barometer of a country’s economic health)
Value of the dollar – the international value of the U.S. currency
Oil is refined and processed into gasoline. The gasoline market has demand and supply
Production Weather Wars Politics Exploration
OPEC, supplier of more than 40 percent of the world’s oil, lowered its forecast for 2009 oil demand to 87.66 million barrels a day due to the global economic slowdown.
The OPEC governor said that OPEC needs to study the effects of its production cuts before considering an emergency meeting by at least reviewing the data from September and October.
OPEC agreed to a limit for 11 members of 28.8 million barrels a day, 500,000 barrels lower than their July output. They meet again on Dec. 17.
1 Saudi Arabia:9,475,000 2 Russia:9,400,000 3 United States:7,610,000 4 Iran:3,979,000 5 China:3,631,000 6 Mexico:3,420,000 7 Norway:3,220,000 8 Canada:3,135,000 9 Venezuela:3,081,000 10 United Arab Emirates:2,540,000 11 Nigeria:2,451,000 12 Kuwait:2,418,000 13 Iraq:2,130,000 14 United Kingdom:2,075,000 15 Libya:1,720,000 16 Angola:1,600,000 17 Brazil:1,590,000 bbl/day
Total U.S. marketed natural gas production is expected to increase by 7.8 percent in 2008 and by 3.8 percent in 2009. Strong year-over-year production growth has been led by the development of onshore fields, particularly in Texas and Wyoming, where production increased by 16 and 12 percent, respectively, during the first 6 months of 2008 relative to year-ago levels.
How much oil does the U.S. consume each day? 20.7 million barrels
How much oil does the U.S. produce each day? 7.6 million barrels
How much oil does the U.S. import each day? 9.7 million barrels
How much does the U.S. import each day in other petroleum products? 3.4 million barrels Petroleum products include unfinished oils,
liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, etc.
Country YTD 2008 YTD 2007 CANADA 2,459 2,458 SAUDI ARABIA 1,558 1,435 VENEZUELA 1,196 1,363 MEXICO 1,302 1,593 NIGERIA 1,052 1,054 IRAQ 677 473 ANGOLA 527 554 RUSSIA 486 419 ALGERIA 524 722 VIRGIN ISLANDS 329 327 BRAZIL 250 204
Alternative fuels Worldwide Economic Growth
China Conservation Income Changing taste and preference
Total U.S. petroleum and other liquids consumption is projected to decline by 610,000 bbl/d, or about 3 percent, in 2008
World 80,290,000 United States 20,800,000 European Union 14,550,000 China 6,930,000 Japan 5,353,000 Russia 2,916,000 Germany 2,618,000 India 2,438,000 Canada 2,290,000 Korea, South 2,130,000
Total natural gas consumption is expected to increase by 2.7 percent in 2008 and by 2.2 percent in 2009
Price Quantity supplied (QS) $2.30 300 million gallons per day $2.90 340 $3.20 380 $3.50 400 $4.10 500 Price Quantity demanded by all U.S. consumers of
gasoline (QD) $4.70 300 million gallons per day $4.10 350 $3.50 400 $2.90 425 $2.30 470
Is the market efficient? Price gouging – pricing above the market price
when no alternative retailer is available
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1998 1.131 1.082 1.041 1.052 1.092 1.094 1.079 1.052 1.033 1.042 1.028 0.986
1999 0.972 0.955 0.991 1.177 1.178 1.148 1.189 1.255 1.28 1.274 1.264 1.298
2000 1.301 1.369 1.541 1.506 1.498 1.617 1.593 1.51 1.582 1.559 1.555 1.489
2001 1.472 1.484 1.447 1.564 1.729 1.64 1.482 1.427 1.531 1.362 1.263 1.131
2002 1.139 1.13 1.241 1.407 1.421 1.404 1.412 1.423 1.422 1.449 1.448 1.394
2003 1.473 1.641 1.748 1.659 1.542 1.514 1.524 1.628 1.728 1.603 1.535 1.494
2004 1.592 1.672 1.766 1.833 2.009 2.041 1.939 1.898 1.891 2.029 2.01 1.882
2005 1.823 1.918 2.065 2.283 2.216 2.176 2.316 2.506 2.927 2.785 2.343 2.186
2006 2.315 2.31 2.401 2.757 2.947 2.917 2.999 2.985 2.589 2.272 2.241 2.334
2007 2.274 2.285 2.592 2.86 3.13 3.052 2.961 2.782 2.789 2.793 3.069 3.02
2008 3.047 3.033 3.258 3.441 3.764 4.065 4.09 3.786