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54230
Increased oil price
statistikk
2011-07-06T10:00:00.000Z
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), Q1 2011

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Increased oil price

The average Brent Blend crude price in 1 s t quarter 2011 was 24 per cent higher than in 4 t h quarter 2010. The main driver for the increase was geopolitical concerns by oil market participants regarding the escalating unrest in the Middle East and North Africa.

Brent Blend

The average Brent Blend crude price in 1 s t quarter 2011 was USD 105.5/bbl against USD 87.5/bbl in 4 t h quarter 2010.

After a relative stable development in the crude price during the first three quarters of 2010, the crude price increased significantly in 4 t h quarter 2010. While the increase in 4 t h quarter was mainly due to stronger oil demand than expected, the main driver for the continued increase in 1 s t quarter 2011 was increased fear among market participants that the unrest and uprising in the MENA region should spread to the major production countries in the region and result in significant larger drop in oil supply.

The crude oil price increased during the whole quarter without any substantial corrections. The price was traded at USD 93.33/bbl on 7 January and reached its highest level at USD 117.36/bbl on the quarters last day, 31 March.

From the middle of December 2010 to 11 January the Brent Blend increased by USD 6/bbl to USD 97.61/bbl, mainly due to higher than expected oil demand within OECD, unusual cold weather in most of the Northern Hemisphere and draws in crude oil stocks.

The crude oil price continued to increase in the last week of January, mainly due to the political unrest in Egypt. Oil market participants feared that the political turmoil in Egypt should spread in the region and also feared potentially disrupting oil flows through the Suez Canal or the Suez-Mediterrian (SUMED) oil pipeline.

The Brent Blend averaged at USD 96.91/bbl in January.

In the first three weeks of February the Brent Blend price remained relatively stable within the USD 99-103/bbl range. From 18 February to 23 February the crude price increased by USD 9/bbl to USD 111.25/bbl. The sharp increase was due to the armed uprising in Libya. During the next weeks the foreign oil workers were evacuated from country and within the middle of March the crude oil production in Libya had decreased by more than 1 million barrels per day to 0.5 barrels per day.

However, large- scale seasonal maintenance at refineries in Europe and the US for February and March muted the impact of the reduced production in Libya. Still, the Brent Blend was traded above USD 116/bbl in the first week of March.

The Brent Blend averaged at USD 104.03/bbl in February.

15 March the Brent Blend was traded at USD 108.52/bbl. The decrease was mainly caused by the catastrophic earthquake and tsunami in Japan. Oil market participants anticipated that the shut- in of around one- third of refineries would reduce the country´s need for crude oil in the short term.

The crude price turned already the next day and on 17 March the price was USD 114.90/bbl.

The UN Security Council´s resolution to authorize member states to establish and enforce a no- fly zone over Libya increased the probability for an escalating and long-lasting conflict. Saudi Arabia and the UAE sent security forces to Bahrain to help the Kingdom to stop the increasing protests in the country. The main worry by the oil market participants were that the tensions should spread to Saudi Arabia. In addition, it was expected a higher Japanese oil product demand, mainly to use in power generation to compensate for the shut- in of many nuclear and other power plants.

In the rest of the month the Brent Blend crude oil price remained relatively stable within the USD 115-117/bbl range.

The Brent Blend averaged at USD 114.67/bbl in March.

The average Brent Blend crude oil price in the 2 n d quarter is USD 118.15/bbl when two weeks remaining.

Global production of crude oil

According to the International Energy Association (IEA) Monthly Oil Market Report, the global production of crude oil came to 87.5 million barrels day in 2010. This is an increase of 1.8 million barrels a day compared with the crude production in 2009.

The total non-OPEC production in 2011 is estimated at 53.3 million 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 2010.

Global demand for crude oil

According to the IEA Monthly Oil Market Report, the global demand for crude oil came to 88.0 million barrels a day in 2010. This is 2.7 million barrels a day higher than the crude oil demand in 2009.

The global crude oil demand in 2011 is estimated at 89.3 million barrels a day by the IEA.

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