Current Oil Price

Blue Peter · Post by **Blue Peter** » 29 Nov 2007, 15:42

Tess wrote:They'll be back though. Just as soon as the oil market gets tight again...

What's that? You want to know when? It depends on how long OPEC leave the taps open. In the last cycle it was two years till they decided they'd oversupplied the market - from Q4 2004 until Q4 2006. Two more years would take us up to the end of 2009, which some hold as the date of the big PO itself.

Just to display my usual oil industry ignorance. From Q4 2004 to Q4 2006.

Using:

http://www.theoildrum.com/files/plateau_price_nov07.png

IEA says oil went from about 83.5 to 85.25 mbpd
EIA says it went from about 83.75 to 84.5 mbpd

(which one of these do we trust more? According to the EIA, the taps of the whole oil market were throttled back at the end of Q2 2005)

And the oil price went from about $46 to $60.

Of course, after Q4 2006, the price took off again.

Looking at the graphs, actually, it looks like to me that at about Q4 2004, the rate of the increase actually decreases, compared with the 2002 ? 2004 period (during which period, the price of oil more than doubled). And the fall in price from roughly mid 2006 has been recovered (i.e. if you had followed the price trend line from roughly 2002, you?d expect to be where we are now).

I?m not quite sure what I?m saying here, but it looks a bit more complicated than the taps being opened in the period you mention.

Peter.

RevdTess · Post by **RevdTess** » 29 Nov 2007, 16:19

I was talking about OPEC supply, not total supply. Totally different thing.

Blue Peter · Post by **Blue Peter** » 29 Nov 2007, 16:28

Tess wrote:I was talking about OPEC supply, not total supply. Totally different thing.

I did understand that, but it's a global market with a global price (more or less) and the total chart was the only thing I could find easily. I guess that I expected to see a bigger effect on this chart during the dates which you mention than I can see.

Or, are you saying that what OPEC say and do has more influence than what others do and that an OPEC barrel is more important in that respect than a non-OPEC barrel?

Peter.

RevdTess · Post by **RevdTess** » 29 Nov 2007, 16:45

OPEC tends to judge its output to match what non-OPEC is doing. So if there is oversupply then it cuts output, and if there is undersupply it increases output. When it does so, it tips the balance from one to the other. While the market is oversupplied as it was from end-2004 to end-2006, stocks built until there was no more storage available. Then at the end of 2006 OPEC cut supply and stocks have drawn down to minimum operating levels in one year.

In other words, it is OPEC that shifts us from one equilibrium to another, and this is why what OPEC decides to do is so important. I'm sure they would love to balance the market somewhere in between, but this is like balancing a pin on the end of your finger.

Blue Peter · Post by **Blue Peter** » 29 Nov 2007, 17:24

Tess wrote:OPEC tends to judge its output to match what non-OPEC is doing. So if there is oversupply then it cuts output, and if there is undersupply it increases output. When it does so, it tips the balance from one to the other. While the market is oversupplied as it was from end-2004 to end-2006, stocks built until there was no more storage available. Then at the end of 2006 OPEC cut supply and stocks have drawn down to minimum operating levels in one year.

In other words, it is OPEC that shifts us from one equilibrium to another, and this is why what OPEC decides to do is so important. I'm sure they would love to balance the market somewhere in between, but this is like balancing a pin on the end of your finger.

Thanks, that's very interesting.

Peter.

biffvernon · Post by **biffvernon** » 29 Nov 2007, 19:38

What does the 1 Year Forecast (bottom right box in our ticker) mean? It's been showing in the low 120s for quite a while but dropped today.

RevdTess · Post by **RevdTess** » 29 Nov 2007, 21:45

biffvernon wrote:What does the 1 Year Forecast (bottom right box in our ticker) mean? It's been showing in the low 120s for quite a while but dropped today.

Only thing I can find on their website is this:-
http://www.oil-price.net/forum/viewtopic.php?t=142

It would be interesting to know what else goes into their forecast model.

Aurora · Post by **Aurora** » 05 Dec 2007, 08:33

Oil Rises on Speculation OPEC to Reject Calls for Output Gain

http://www.bloomberg.com/apps/news?pid= ... efer=india

Bloomberg - 05/12/07

Crude oil rose in New York on speculation the Organization of Petroleum Exporting Countries will reject calls for an increase in production.

OPEC, which supplies more than 40 percent of the world's oil, will leave output unchanged when it meets later today, a Persian Gulf oil official involved in the negotiations said.

Crude oil for January delivery rose as much as 44 cents, or 0.5 percent, to $88.76 a barrel on the New York Mercantile Exchange. It traded at $88.72 at 1:39 p.m. Singapore time.

RevdTess · Post by **RevdTess** » 05 Dec 2007, 10:07

No doubt there'll be a wave of oil drum articles now claiming they're not raising production because they can't ...

PS_RalphW · Post by **PS_RalphW** » 05 Dec 2007, 10:08

WTI Nymex crude is now cheaper than Brent again, on
upstreamonline.com, WTI is 88, brent is 90, Luoisiana Light is 92
and Tapis nearly 96.

Even middle eastern heavy sludge is 86, so the WTI price is not representative of global prices at the moment. The USA is getting their oil cheap.

Keela · Post by **Keela** » 11 Dec 2007, 23:32

The ticker has tipped 90 again.......

Edit... Can't remember where the link came from, but this site is quite nice for showing what's been happening to WTI prices. I see now price has been up to 90 other days and I missed it...
http://stockcharts.com/h-sc/ui?s=$WTIC& ... 0144692236

RevdTess · Post by **RevdTess** » 11 Dec 2007, 23:42

Saw T.Boone Pickens on CNBC today doing his thing about $100 "within the next 6 months" and "we'll see $100 before we see $80" and "the world will never produce more than 85 million barrels of oil per day."

Vortex · Post by **Vortex** » 12 Dec 2007, 10:05

The Pickens point that got me was that he expected NG to replace petrol as a motor fuel.

Time to invest in CNG related companies methinks!

RenewableCandy · Post by **RenewableCandy** » 12 Dec 2007, 12:39

Vortex wrote:The Pickens point that got me was that he expected NG to replace petrol as a motor fuel.

Blimey it really won't be long before we don't have any left to heat our house with then!!

skeptik · Post by **skeptik** » 12 Dec 2007, 13:02

Tess wrote:Saw T.Boone Pickens on CNBC today doing his thing about $100 "within the next 6 months" and "we'll see $100 before we see $80"

I'm not so certain as Mr. Pickens about that. It all depends how fast and how hard the US heads into recession next year - and if hard and fast to what extent the rest of the world gets dragged down too.