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33348
Volatile oil market
statistikk
2005-11-03T10:00:00.000Z
Energy and manufacturing
en
ogintma, Oil and gas activities, international market conditions (discontinued), petroleum production, oil production, oil demand, oil prices, crude oil, brent blend, natural gas, condensate, NGLOil and gas , Energy and manufacturing
false

Oil and gas activities, international market conditions (discontinued), Q3 2005

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Volatile oil market

The prices of Brent Blend fluctuated between USD 39 and USD 68 per barrel in the first eight months of 2005. Strong growth in demand for crude oil has led to diminishing spare production capacity. The record high prices are a result of market fears that the global supply will be unable to satisfy the growing demand for crude oil.

Brent Blend

The average Brent Blend spot price in the first and second quarter of 2005 was USD 47.46/bbl and USD 51.20/bbl respectively. In the first eight months of 2005 the average price was a record USD 53.11/bbl. The average price in 2004 was USD 38.29/bbl against USD28.90/bbl in 2003.

A mild start to the winter and high levels of refinery throughput contributed to significant stock builds in the fourth quarter of 2004 and led to a sharp fall in crude prices from the peak in October to the end of the year. On the last day of 2004, the price of Brent Blend was USD 39.83/bbl.

Crude oil prices strengthened for most of January with a weather related rally pushing Brent Blend close to USD 47/bbl. Cold weather in the US, Europe and Asia resulted in increased demand for heating products.

At their meeting on 30 January 2005, OPEC decided not to change their production quota. This decision contributed to a fall in oil prices.

From 9 February to 17 March the Brent Blend price increased from USD 42.64/bbl to USD 56.25/bbl.

The sharp surge in prices was partly caused by cold weather in the northern hemisphere. In addition, the International Energy Association's (IEA) estimates for global demand in 2005 were revised up while their estimates for global supply in 2005 were revised down.

From 8 April to 13 June the Brent Blend price remained relatively stable around USD 50/bbl. OPEC decided to increase their quota by 0.5 million barrels a day and US petroleum stocks were increasing. In addition, the IEA made a downward revision of global demand and an upward revision of global supply in their monthly oil market reports in both May and June. These events brought stability to the oil market.

From 13 to 27 June the oil price increased from USD 51.11/bbl to USD 51.11/bbl. OPEC increased their quota by another 0.5 million barrels to 28 million barrels a day, but the decision did not affect OPEC's output as the cartel's real production had already reached 29 million barrels a day. The diminishing OPEC spare capacity led to increasing uncertainty in the oil market. It was feared that global supply would not be able to satisfy the growing crude oil demand.

During July the Brent Blend price remained relatively stable between USD 57 and USD 60/bbl. In addition to fears of excess demand, the production in the Gulf of Mexico was threatened by storms.

The Brent Blend spot price averaged USD 64.46/bbl in August and peaked at USD 67.81/bbl. The high price at the end of August was due to fears of negative consequences of Hurricane Katrina on the crude and petroleum supply.

Global production of crude oil

According to the International Energy Association (IEA) Monthly Oil Market Report, the global production of crude oil came to 84.4 million barrels a day in the second quarter of 2005. This is an increase of 1.4 million barrels a day compared with the corresponding quarter in 2004.

The total non-OPEC production in 2005 is estimated at 51.0 millon barrels a day by the IEA.

Global demand for crude oil

According to the International Energy Association (IEA) Monthly Oil Market Report, the global demand for crude oil came to 81.9 million barrels a day in the second quarter of 2005. This is an increase of 1.0 million barrels a day compared with the corresponding quarter in 2004.

The global crude oil demand in 2005 is estimated at 83.9 million barrels a day by the IEA.

 

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