Limburg, 18.12.2004
In recent weeks, crude oil prices have risen by more than ten percent. North Sea brand "Brent" registered at 43.39 dollars and in New York, prices reached 46.28 dollars per barrel. Why this constant up and down? Angst about lack of supply has again increased significantly in the USA as stock figures were deceptive. Moreover, weather forecasts show that low temperatures are expected in North America. Threats of strikes in Nigeria and the break-up of Yukos in Russia that can no longer be delayed did the rest. Also, the OPEC decision to cut supply until January was critically reconsidered, as a continued very high demand is to be exected next year too, especially from China.
Limburg, 14.12.2004
Crude oil prices continue to fall and OPEC wants to reduce supply. Although OPEC decided to reduce supply quantity from the first of January at its meeting in Cairo, crude oil prices in New York fell further to 40.71 dollars and reached their lowest point in five months. North Sea "Brent" oil registered at 37.39 dollars. On 10th December, OPEC decided to reduce supply quantity by one million barrels per day from the first of January 2005 and meet again on 30th January to discuss further measures. Normally, this announcement should lead to increases in price, but the opposite happened. Many traders thought that the reduction would be insufficient to maintain the current price level, so the crude oil rate dropped further. The US currency itself initially managed to halt its descent and rose to 75.68 Euro cents.
Limburg, 6.12.2004
What is there left to depend on? Within three days, the price of crude oil in New York fell from 50 to 42.54 dollars per barrel. Brent North Sea oil even managed to break through the 40 dollar lower limit mark and closed at 39.36 dollars. The Euro rose again. The dollar is now worth just 74 Euro cents. The oil ministers meeting is taking place on 10th December in Cairo. It is generally expected that the current supply poicy will be retained.
Limburg, 29.11.2004
Oil prices are rising again. In New York, values last Friday rose by over five percent and recorded 48.89 dollars per barrel. Even North Sea oil "Brent" was registered at 45 dollars per barrel. This counter-effect after the strong price reduction of over 15 percent in recent weeks was overdue and generally expected. Rumours were also circulating around the market of a possible supply reduction by OPEC. In the course of recent weeks, the Euro reached a new recor high and the US currency is currently valued at 76.74 Euro cents.
Limburg, 15.11.2004
Crude oil values have fallen again and were recorded at 47.32 dollars per barrel in New York and 42.31 dollars for "Brent" North Sea oil. The US currency continues to show weakness at rates of around 77 Euro cents. Despite strenghtened demand due to relatively low temperatures in North America and central Europe the downward trend in crude oil prices continued. Nonetheless, international oil supplying is working to capacity. Only in Nigeria, one of the world's most important oil supply countries, oil workers are again threatening strike action. The basic problem continues, with currently very high demand around the world, which can only be met with great strain on the supply countries. Certainly, partial responsibility for the long term trend is down to dealings with valuable crude oil in the large national economies of USA and China, where there are still no efforts being made towards energy saving.
Limburg, 7.11.2004
In New York, crude oil prices fell below the 50 dollar mark to 49.61 dollars per barrel and contracts for North Sea oil "Brent" fell to 46.42 dollars. The Euro recorded a new record high against the dollar, so the US currency is now worth just 77 Euro cents. This makes crude oil even cheaper here. There is currently a prevalence of positive news on the oil market: total US oil stocks have risen again although the supply situation for fuel oil is still very tense. In Iraq, supply is slowly getting into gear and the trhreats of strikes in Nigeria initially seem to have abated.
Limburg, 29.10.2004
The increase in the American oil reserves turned out to be less than expected and has caused a massive price slack in US oil prices. On the New York commodity future market, crude oil for the December supply fell to 52.46 dollars a barrel.
Limburg, 16.10.2004
The price of crude oil is going up and up. On 15.10.2004, the 55 dollars per barrel mark was passed for the first time.
This makes oil 70 percent dearer than one year ago.
Despite the continued rise in the price of oil, OPEC does not wish to revise its price target upwards. So, the official price target for OPEC oil remains in the range of 22 to 28 dollars a barrel. OPEC has already increased supply quotas to the highest level in 25 years in order to dampen the price increase.
According to information from industry experts, the main reasons for the high oil price are the ongoing slow start to production after the damage by Hurricane "Ivan" in the Gulf of Mexico, the tension in the security situation in Iraq in Nigeria, uncertainties about Russian oil company Yuko, and the increasing demand ahead of the forthcoming winter.
After exceeding the 55 dollar mark, some experts now expect an oil price of US $ 60.00
by the end of the year.
Limburg, 9.10.2004
As yet, no end to the rising oil price is foreseeable. On 8.10.2004, West Texas Intermediate crude oil climbed to a new high of 53.40 dollars a barrel in New York. The new high can be explained mainly by the continuing supply bottlenecks caused by Hurricane Ivan in the Gulf of Mexico. Experts estimate that by the end of November the whirlwind will have resulted in 35 to 40 million barrels of production lost. This is equal to the amount of oil used byt the United States in just two days. To make life even more difficult,
oil reserves in America are at their lowest point in ten years and the winter season is about to begin. In the past twelve months, the price has risen by almost 80 percent.
Limburg, 30.09.2004
After threats of war from rebels in oil-rich Nigeria, the oil price was initially pushed to over 50 dollars. The unstable political situation of the seventh biggest oil exporter in the world and the continuing interruprions to supplies from Iraq and Russia, coupled with demand currently being at its strongest for 24 years have contributed to the fresh increase in price of the raw fuel.
Limburg, 29.09.2004
At 49.50 dollars a barrel (159 litres), American crude oil prices have reached a new record high. This brings them close to the record mark of over 50 dollars, which many oil traders expect to see soon. The previous record price was recorded on 20th August, at 49.40 dollars.
Since the beginning of last week, US oil prices have risen by over eight percent. New unrest in Nigeria and the production and supply losses in the Gulf of Mexico were the main culprits of the increase. Hurricane "Ivan" damaged several rigs in the Gulf of Mexico and temporarily brought a large oil import harbour and numerous refineries on the Gulf coast to a standstill.
Limburg, 22.09.2004
Crude oil from the organisation of oil export countries recorded a further price jump. The price has risen to 41.75 dollars a barrel. This is 1.04 dollars more than on the previous day, making it the highest value since 23rd August.
Limburg, 17.09.2004
In order to counter the high oil price, OPEC decided yesterday to increase official supply quota. The cartel agreed to raise the quota for oil supply to 27 million barrels per day. Hoewver, crude oil prices hardly reacted to the prospect of a possible increase in supply as the OPEC countries have already been producing around 28 million barrels a day more than the official target for months.
Limburg, 7.9.2004
OPEC is expecting a continuing fall in oil prices. "International oil prices are expected to fall between September and December", according to a statement. One of the reasons for this is the greater supply in Iraq, as it is expected that the security situation in the OPEC member country will improve.
Even the liquidation of the Yuko scandal in Russia and the presidential elections in the USA could contribute to falling prices if no other factors counter these. OPEC estimated the present international excess supply of crude oil at 1.5 million barrels per day. The OPEC states currently produce around 30 million barrels of oil a day, which is around four million barrels more than the official quota of 26 million barrels.
In the last few days, the US oil price dropped slightly. One barrel was worth 43.99 dollars.
Limburg, 3.9.2004
A threat of production cessation by the largest Russian oil exporter, Yukos, pushed up rates on the international oil markets by a significant amount.
In London the price for one barrel (159 litres) of North Sea type Brent for supply in October shot to over 42 dollars again for well over a week. At the end, one barrel traded at 41.99 dollars.
In New York too, rates rose significantly. One barrel was worth 44.46 dollars. Just 2 days ago, the fallen US stocks pushed the barrel price up by more than two dollars.
The Russian oil company in Moscow reported that Yukos may be forced to stop production after a court froze business accounts. Current assets and future receipts have been frozen at the value of 76,000 million Rubels (2,150 million Euro). The company is no longer able to pay salaries and wages and can no longer exclude regional social tensions or the possibility of stopping production completely. For weeks now, the legal tug-of-war in Russia has been a contributing factor in the instability of the raw materials markets.
Limburg, 27.08.2004
The political development in Iraq and the disturbing news from OPEC management have led to a significant drop in the price of crude oil.
As announced by the secretary of OPEC, the average price for a barrel (159 litres) fell below the 40 dollar mark for the first time in two weeks. It was stated at 39.02 dollars. In New York the oil price rose back to 43.48 dollars after a five-day, sharp downward trend, although observers were reckoning on further drops towards around 40 dollars in the coming days.
Announcements from OPEC president Yusgiantoro, confirming that his organisation would do everything possible to prevent a further increase in oil prices and to support the downward trend had a calming effect. "The price of oil has fallen, but we want it to go back to 30 dollars" said Yusgiantoro according to the newspaper "Jakarta Post". The organisation should make a decision on a possible output increase on 14th September. The eleven OPEC countries are currently producing at a record daily level of around 29.5 million barrels and want to increase production probably by a further 500,000 barrels.
However, industry experts do not assume from this that the price of crude oil will fall to 30 dollars a barrel. Under the effects of ongoing supply angst, it is believed in these circles that corresponding declarations of intentions from Yusgiantoro are not particularly realistic in the short term.
Limburg, 20.08.2004
Ongoing violence in the oil supply country of Iraq has catapulted prices for raw fuels to new record levels. The price of crude oil occasionally approached the 50 dollar mark. OPEC chief, Purnomo Yusgiantoro, demonstrated increasing anxiety about the price trend. The price of oil rose above the 49 dollar mark for the first time. Many economies are waiting for an oil shock on the world economy. They assume that the effects will only be visible next year. According to the view of economy expert Peter Bofinger, this year's German growth will hardly slow the oil price increase down. "At present, I see no reason to lower the growth forecasts made in the spring" Bofinger announced to "Berliner Zeitung" newspaper. At the time of the forecast, the oil price was relatively high. "Also, the level of the oil price is prone to fluctuation in the same way as the value of the Euro" Bofinger continued. The degree to which these fluctuations may affect companies and consumers is almost impossible to predict, Bofinger said.
Limburg, 19.08.2004
There is no slowing of inreases in the price of oil. In the United States, the oil price reached a record level, at 47.50 dollars. This was the highest price in 21 years. Traders blame the continued increase on the official published figures for the American oil reserves, which turned out lower. Trader nervousness is also being stirred up further by the free supply reserves all over the world, as a drop in production would be difficult to counter. According to general consensus, only Saudi Arabia has the potential to raise more oil from the ground in the short term. A large interruption to production would immediately cause prices to rocket. Danger areas for oil production include the crisis surrounding Russian oil giant Yukos, the struggles in Iraq and the situation in Venezuela after the referendum.
Limburg, 5.8.2004
Futures trading in crude oil registers a new record high on an almost daily basis. It might be announcements of terrorist attacks on Arabian oil supply systems, which cause dealers to panic, or possibly rumours of a threatened production stop at Russian energy company Yukos.
Of course, there are speculators who take advantage of the uncertainty and run speculation operations. However, that is not the case. Even the price of oil to be supplied in 2005 and later has risen sharply in recent months.
There are structural changes happening in the international oil market. The rising oil price is simply due to the fact that the global demand for oil is increasing rapidly and the producers have capacity bottlenecks. The increased global demand for oil is at its highest for 16 years, as the world economy is at its best in decades.
Principally in the areas of Asia, Latin America and the United States, the economy is running to capacity. States such as China and India, where great steps are being taken to catch up with the industrialised nations of the West, are now demanding their share of world oil consumption. China alone requires a good third of additional oil demand this year.
However, there are only limited reserve capacities for this demand. The raw material, oil itself, is still available in sufficient quantities - what is lacking are sufficient supply and refinery capacities. Producers have dramatically reduced their investments in drilling and refinery plants in the last 15 years, as the price tred did not provide sufficicient incentive for investment. At the price level reached now, this is of course not so. Only supply capacities cannot be built between one day and the next.
The oil price will continue to rise. This will be ensured just by the industrialisation and motorisation of the most populated countries in the world - China and India. Estimates are that global oil consumption will increse by two thirds by the year 2030. In order to meet this demand, producers also need to oil deposits for which development would not yet be economically viable at the present price level.
There is definitely no danger of a price shock at present. The price of crude oil is at an absolute record high. Adjusted to inflation, however, oil is only half the price it was at the start of the eighties, after the Iranian revolution. In order to realise the real price level from the time of the Gulf war in 1990/91, the price of crude oil would have to rise to 50-55 dollars a barrel.
Limburg, 3rd August 2004
Crude oil prices have risen further. The increase in price is being blamed on the high demand. OPEC sees no option of imminently increasing production. For the first time since October 1990, the price on North Sea type Brent jumped above the 40 dollar mark on the London futures market. Nonetheless, oil prices are still a long way from their highs of 1979 and 1980.
Limburg, 2nd August 2004
In July, the price of oil rose on New York futures trading by 18 percent. One Barrel (159 litres) for supply in September was trading at 43.85 dollars at some points on Friday. This is the highest price since the start of New York futures trading 21 years ago. In London too, the price of Brent oil passed the 40 dollar mark for the first time since the Gulf war.
This trend primarily represented a short-lived speculative phenomenon. Angst about terrorist attacks on the Arabian oil infrastructure is also still having a minor effect. The price peak is more of a reflection of anxiety about demand-related bottlenecks this winter and in years to come. The fact that the price peak could be the result of a structural trend is highlighted by the prices of long term futures contracts. Two-year futures on WTI oil are already trading at rates of 35 dollars in New York - around 50 percent more than six months after the Americans invaded Iraq.
Behind this, there is also the recognition that the strong economic growth of upcoming countries such as China and India will permanently increase demand for oil. This is currently only offset by limited supply reserves. The capacity of the organisation of oil exporting countries (OPEC) is currently working at over 95 percent. This too explains why the oil market is reacting so sensitively to the affairs suronding the Russian oil company Yukos at present.
After rumours to the contrary, bailiffs in Moscow clarified last week that Yukos will continue to sell oil without restrictions. The foreseeable insolvency of the oil company, however, continues to fuel anxiety of production stops in oil trading. After all, Yukos represents around a fifth of Russian oil production and 3.6 percent o international oil production.
Limburg, 15th July 2004
The continued expansion of supply quotas up to 1st August 2004 is already determined, according to OPEC announcements.
A planned meeting of ministers in the coming week where the decision from the beginning of June was to have been rechecked is no longer necessary. The price of oil fell slightly, but just pushed over the 40 dollar mark in New York. According to experts' assessments, the international increase in demand for oil and the unstable situation in the Middle East will continue to determine prices.
Owing to the international rise in price, OPEC increased the supply quantity at the beginning of June by 2 mill. barrels per day as of 1.7.2004. From August, production should increase by a further half a million barrels.
Limburg, 28th June 2004
Rates for crude oil have continued to ease slightly. This has slowed German inflation. In June the cost of living was just 1.8% greater than one year ago, whereas in May it was 2% above the level of the previous year.
Limburg, 5th June 2004
After the OPEC decision to expand supply quantities, oil prices have come under pressure. In London, the price for North Sea oil fell to below US $ 36.00 a barrel and in New York it was under 39.00 dollars. In general, experts reckon that there will be no massive, sustained fall in price.
Limburg, 2nd June 2004
After the terrorist attacks in Saudi Arabia, oil prices have shot up. In New York the fear of new attacks on the worldd's biggest supply country and the dominant OPEC supplier pushed the American price of crude oil to the new record high of nearly 42 dollars a barrel (159 litres). At their meeting on Thursday, OPEC ministers will discuss extending supply quantities and possibly even raising the official price range of 22 to 28 dollars a barrel.
OPEC, which governs around one third of world supply, is considering expanding the officiallly decided supply quantity of 23.5 million barrels by 10 percent, according to reports from members. In fact, supply is currently already 25.5 million barrels. Many producers are already reaching the limits of their capacity. Only Saudi Arabia still has large reserves. Analysts estimate that the eleven OPEC countries are unable to supply more than 29 million barrels.
Limburg, 24th May 2004
On Monday, the price of crude oil again rose significantly. This increase was caused by fears that even in the event of an official increase in oil production by the organisation of oil exporting countries (OPEC), it would not be possible to achieve a lasting relaxation of the supply situation. In the evening, the near July contract for West Texas Intermediat WTI cost 41.80 dollars a barrel (around 159 litres) for a time, which brought it to just below the record price of 41.85 dollars registered in New York last week. The hope of a future increase in oil production put slight pressure on the oil price on Monday.
Analysts had expected that the International Energy Forum, taking place in Amsterdam from 22nd to 24th May with OPEC representatives, would at least reach a preliminary decision on cartel response to the question of future supply policy. This should be announced officially after the OPEC meeting on 3rd June in Beirut. In fact, only Saudi Arabia gave concrete agreement to higher production. According to the oil minister of the leading production country, the required OPEC supply quantity, which has nominally been at 23.5 million barrels per day since 1st April, is to be increased by 2.3 to 2.5 million barrels. Traders see it as noteable that the Saudis still thought at the beinning of last week that increasing supply by 1.5 million barrels would be sufficent, but on Friday they were talking about 2 million barrels and and Saturday they suggested a total of 2.3 to 2.5 million barrels. Observers see this change as reflecting the level of political pressure on Saudi Ariabia from the Americans and other consumer countries.
Limburg, 14th May 2004
Crude oil prices have risen to their highest level in almost 14 years. The price for the type West Texas Intermediate (WTI) passed the 40 dollars a barrel (around 159 litres) mark in New York on Tuesday for the first time since October 1990. In the light of the first Gulf war, the previous record of a good 41 dollars was reached at that time. Meanwhile, the current excess of the psychoogically significant level of 40 dollars is the peak in a bull phase, which started in Autumn 2003.
On Monday, prices again came under pressure, when the Saudi Arabian oil minister asked for the supply quantity from the organisation of oil exporting countries (OPEC) to be increased by 1.5 million barrels from the present 23.5 million barrels per day. However, the Americant state Energy Information Administration (EIA) in Washington and the International Energy Agency (IEA) in Paris, have increased their forecasts for the international oil demand. In the monthly report presented on Wednesday, the IEA assumes that the world oil demand this year will average 80.6 million barrels a day. This is around 2 million barrels a day more than in 2003.
Limburg, 5th May 2004
On Tuesday, renewed terrorism worries pushed the price of crude oil to the highest level in fourteen years. The price for a barrel (159 litres) of North Sea type Brent, was 35.92 dollars in London for a time -
4 percent more than the previous day and a price which it has not seen since October 1990.
Analysts blame the weekend attack on an oil plant in Saudi Arabia for causing the new price increase. The act of terrorism and the uncertain situation in Iraq strengthened concerns about oil supplies from the Middle East, which is responsible for around one third of international oil supply. Also, the stock levels in the United States are too low, in consideration of the high petrol requirement for the forthcoming holiday season. The organisation of oil exporting countries (OPEC) will be keeping supply limited until further notice.
Factors affecting price are the growth-strong Chinese economy, the weakness of the dollar and the previously slack and expensive tapping of new supply options. In the short term, analysts say these factors will push up the price of crude oil. This may threaten the economic upturn.
Limburg, 1st April 2004
OPEC Cuts Supply
At the conference in Vienna, the organisation of oil exporting countries (OPEC) decided to implement the planned reduction in supply quotas despite the high prices of oil.
At their meeting in February, the ministers had already decided to reduce the supply quantity, in order to counter the feared demand slump in the spring. After that, the current upper limit for daily production should be reduced from 24.5 million barrels (one barrel is 159 litres) by one million barrels. Even OPEC members, pleaded for the cut to be postponed due to the high oil prices - which were at a 13-year high.
Limburg, 20th March 2004
Even Higher Petrol Prices Due to the Increase in the Price of Crude Oil
Petrol could become even more expensive in the coming weeks. Prices have been hovering at a high level for weeks. All the signs also point to even higher prices. The mineral oil economy is saying that the high point of March last year, when Super Unleaded cost betrween 1.14 and 1.15 Euro, will soon be reached again.
The reasons for this are the international high demand for oil and mineral oil products, particularly in North America. Since the start of the year, the price for "Brent" North Sea oil has fluctuated between 30 and 34 dollars a barrel (159 litres). Prices for premium grade petrol - the product traded most - have been between 345 and 350 dollars a ton on the Rotterdam Spot market for weeks now. In the middle of this week, the price in Rotterdam even reached 355 dollars. In March last year, premium grade petrol was considerably cheaper, at 330 dollars a ton.
The announcement by the organisation of oil exporting countries (OPEC) that production would be cut at the beginning of April, has further consolidated the price level. Obviously, there was no support within OPEC for the attempt by the oil minister of the United Arab Emirates not to limit oil production to 1st April. It is now reckoned that current production of 26 million barrels per day by the organisation will not only be cut to the agreed level of 24.5 million barrels, but reduced even further to 23.6 million barrels per day. The majority of members obviously fear a surplus of oil, especially since the Russians are driving their production flat out.
Limburg, 2nd January 2004
At 28.07 dollars per barrel, the average price of oil in the last year was more than 15% above that of the average price for 2002. Then, one barrel (159 litres) of oil from the OPEC countries was worth 24.26 dollars, as OPEC stated in Vienna. In 2001, it was still just 23.12 dollars.
In the last complete week of 2003, the price fell back to below 30 dollars. Last week, one barrel cost an average of 29.81 dollars - against 30.26 dollars the previous week.
