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8677
Continued gain in crude oil prices
statistikk
2006-09-21T10:00:00.000Z
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), Q2 2006

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Continued gain in crude oil prices

The prices of Brent Blend fluctuated between USD 56 and USD 78 per barrel in the first eight months of 2006. The record high prices are mainly a result of significant and continued disruptions to crude oil supplies, low levels of global spare production capacity and elevated geopolitical concerns surrounding Iran's nuclear programme.

Brent Blend

The average Brent Blend spot price in the first and second quarter of 2006 was USD 61.43/bbl and USD 69.39/bbl respectively. In the first eight months of 2006 the average price was a record USD 67.29/bbl. The average price in 2005 was USD 54.50/bbl against USD 38.29/bbl in 2004.

From 30 December to 30 January the Brent Blend price increased from USD 58.69/bbl to USD 65.08/bbl due to actual and potential disruptions to crude oil supplies. Outages in supply came in Nigeria, the North Sea and Australia. Russian supplies fell due to the fact that low temperatures affected the logistics and Iraqi export remained weak. In addition, Iranian nuclear issues concerned the oil market.

At a meeting on 31 January 2006, OPEC decided not to change their production quota. This decision was in accordance with the market expectations and did not have substantial effect on oil prices.

From 1 February to 16 February the Brent Blend price decreased from USD 65.67/bbl to USD 56.07/bbl due to increasing petroleum stocks in USA. In addition, the oil market was less worried that UN would carry out economic sanctions on Iran in near future. Oil prices rebounded thereafter. A sustained disruption to Nigerian supplies turned the market around. Militant attacks interrupted almost 0.5 million barrels a day of supply. On 28 February the Brent Blend price had increased at USD 58.87/bbl.

From 1 March to 30 March the Brent Blend price remained relatively stable around USD 60/bbl. On 30 March the price jumped almost USD 4/bbl to USD 66.19/bbl, due to further disruption to Nigerian crude supplies and returning geopolitical tensions surrounding the Iranian nuclear programme.

The crude prices continued to make strong gains in April. The Brent Blend averaged at USD 70.66/bbl in April - USD 9.40/bbl higher than in March. The gain was led by a sharp rise in gasoline prices along with stronger political rhetoric from Iran. The increase came against a backdrop of continued disruption to Nigerian supplies and low spare production capacity. In addition, economic data showed higher than expected economic first quarter growth in the leading oil consumer countries, USA and China.

From 2 May to 22 May the Brent Blend price decreased from record high USD 74.99/bbl to USD 65.86/bbl. The decline was due to expectations that inflationary pressures would lead to a further tightening in monetary condition and weaken the global economy and oil demand. In addition, the output from the Gulf of Mexico recovered with the return of the Mars platform.

Brent Blend crude oil prices were relatively flat from mid May to ultimo June, before rising sharply towards the end of June. The increase was driven by strong gasoline prices, refinery problems, remained supply constraints in Nigeria and geopolitical worries surrounding Iran` s nuclear programme.

In third quarter the oil prices have showed a further gain before decreasing in mid August. The average Brent Blend in July came to USD 73.46/bbl and reached a record high of USD 78.46/bbl on 9 August. The high prices were driven by increased disruptions to crude oil supplies along with elevated geopolitical concerns surrounding Iran` s nuclear programme and the war in Lebanon. The oil market also feared the North Atlantic hurricane season approaching.

From 9 August to 15 September the Brent Blend crude oil price has fallen by USD 18.69/bbl to USD 59.77/bbl, due to decreasing gasoline prices, improvements in crude supplies, downward revised hurricane forecasts and ceasefire in Lebanon. In addition, the members of the UN Security Council have not agreed on sanctions on Iran.

Global production of crude oil

According to the International Energy Association (IEA) Monthly Oil Market Report, the global production of crude oil came to 85.1 million barrels a day in the first half of 2006. This is an increase of 0.6 million barrels a day compared with the corresponding period in 2005.

The total non-OPEC production in 2006 is estimated at 51.0 millon barrels a day by the IEA. This is an increase of 0.6 million barrels a day compared with the actual non-OPEC production in 2005.

Global demand for crude oil

According to the International Energy Association (IEA) Monthly Oil Market Report, the global demand for crude oil came to 84 million barrels a day in the first half of 2006. This is an increase of 0.5 million barrels a day compared with the corresponding period in 2005.

The global crude oil demand in 2006 is estimated at 84.7 million barrels a day by the IEA.

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