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Encyclopedia > Oil prices
Oil price in 2003-2005
Oil price in 2003-2005

The price of light, sweet crude oil on NYMEX has been above $40/barrel since late July 2004. By August 6, 2005, the price has been above $60/barrel for over a week. A record price of $65/barrel was reached on August 10, 2005. Download high resolution version (1024x768, 18 KB)Daily oil prices of NYMEX Light Sweet Crude, prepared from data at http://octane. ... Download high resolution version (1024x768, 18 KB)Daily oil prices of NYMEX Light Sweet Crude, prepared from data at http://octane. ... Nodding donkey pumping an oil well near Sarnia, Ontario, 2001 Petroleum (from Latin petrus – rock and oleum – oil), mineral oil, or crude oil, sometimes colloquially called black gold, is a thick, dark brown or greenish flammable liquid, which exists in the upper strata of some areas of the Earths... The New York Mercantile Exchange (NYMEX) is the worlds largest physical commodity futures exchange located in New York City. ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... August 6 is the 218th day of the year in the Gregorian Calendar (219th in leap years), with 147 days remaining. ... 2005 is a common year starting on Saturday of the Gregorian calendar and is the current year. ... August 10 is the 222nd day of the year (223rd in leap years) in the Gregorian Calendar. ... 2005 is a common year starting on Saturday of the Gregorian calendar and is the current year. ...


The cause is the current and speculative demand in relation to the supply of petroleum. The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... Nodding donkey pumping an oil well near Sarnia, Ontario, 2001 Petroleum (from Latin petra – rock and oleum – oil), crude oil, sometimes colloquially called black gold, is a thick, dark brown or greenish flammable liquid, which exists in the upper strata of some areas of the Earths crust. ...


"While oil prices are about 40 percent higher than a year ago, they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980." [1]

Contents


Demand

High demand is led by the U.S. market, the source of an increasing percentage of world's demand for petroleum. The U.S. economy currently accounts for one-quarter of all demand. New demand is also coming from emerging industry in third world nations, including India and especially China which is developing a western-style car culture and whose manufacturing bases have grown very rapidly in recent years. But some business analysts attribute the tremendous increases in demand from Asia to the speculative demand of international financiers. A July 14, 2005 Morgan Stanley report[2] suggests that opinions of the oil market could burst just such an oil bubble if recent indications of declining Asian demand continue. For the Jamaican reggae band, see Third World (band). ... Speculative demand is the demand for financial assets, such as securities, money or foreign currency that is not dictated by real transactions such as trade, or financing. ... Morgan Stanley (NYSE: MWD) is an investment bank and retail broker based in New York. ... Currier & Ives print on economic bubbles, 1875. ...


Sources of the world-consumption-increase in 2004 compared to 2003 (total increase of 3.4%), according to DOE EIA estimates: [3]

  • China: 38.9%
  • US: 19.4%
  • Asia outside Japan and China: 13.8%
  • Canada: 4%
  • UK: 3.5%
  • combined other non-OECD: 21%

Note: the total percentage exceeds 100 because the overall demand from all other countries decreased during the same period. The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ...

Average US retail price of regular unleaded gasoline
Average US retail price of regular unleaded gasoline

Image File history File links from US DOE File history Legend: (cur) = this is the current file, (del) = delete this old version, (rev) = revert to this old version. ... Image File history File links from US DOE File history Legend: (cur) = this is the current file, (del) = delete this old version, (rev) = revert to this old version. ...

Supply

News articles have explained the low supply in the following ways: the war in Iraq that has destroyed some of Iraq's oil refineries, Hurricane Ivan's damage to offshore oil platforms in the Caribbean, YUKOS in Russia, civil unrest in oil producing West Africa especially Nigeria, worker's strikes and mechanical problems with oil production in Norway. The 2003 invasion of Iraq was launched by the United States and the United Kingdom on March 20, 2003, with support from 48 other governments, making up what was described as the coalition of the willing. ... Duration: Sep. ... Nodding donkey pumping an oil well near Sarnia, Ontario, 2001 Petroleum (from Latin petra – rock and oleum – oil), crude oil, sometimes colloquially called black gold, is a thick, dark brown or greenish flammable liquid, which exists in the upper strata of some areas of the Earths crust. ... ... Yukos logo Yukos Oil Company (ОАО НК ЮКОС) is a petroleum company in Russia which, until recently, was controlled by Russian billionaire Mikhail Khodorkovsky and a number of prominent Russian businessmen. ... West Africa is the region of western Africa generally considered to include these countries: Benin Burkina Faso Cameroon Côte dIvoire (Ivory Coast) Equatorial Guinea Gabon The Gambia Ghana Guinea Guinea-Bissau Liberia Mali Niger Nigeria Republic of the Congo (Congo-Brazzaville) Senegal Sierra Leone Togo Chad, Mauritania, and...


World supply (specification) came in at 83 million barrels a day during 2004 in department of energy EIA calculations ([4]). This rate of increase is faster than that of any other date in the past.


Spring 2005 increase

After retreating for several months during the winter of 2004/2005, prices rose to new highs in March 2005. The price of light, sweet crude oil on NYMEX has been above $50/barrel since March 5, 2005. On March 16, 2005, the price surpassed the October 2004 high of $55.17 to close at $56.46. On March 18, the price reached a new high of $57.60. This price was 50% higher than a year earlier. It should, however, be noted that the $50-$60 range is still well below the all-time inflation-adjusted high of $90 reached in 1980. Nodding donkey pumping an oil well near Sarnia, Ontario, 2001 Petroleum (from Latin petrus – rock and oleum – oil), mineral oil, or crude oil, sometimes colloquially called black gold, is a thick, dark brown or greenish flammable liquid, which exists in the upper strata of some areas of the Earths... The New York Mercantile Exchange (NYMEX) is the worlds largest physical commodity futures exchange located in New York City. ... The dollar is the name of the official currency in several countries, dependencies and other regions (see list below), including the US dollar, the worlds most widely circulated currency (see list below). ... March 5 is the 64th day of the year in the Gregorian Calendar (65th in leap years). ... 2005 is a common year starting on Saturday of the Gregorian calendar and is the current year. ...


This spike was largely without the immediate causes of the fall of 2004. During this period the Bush administration was expanding the Strategic Petroleum Reserve at a rate of 250,000 barrels per day. Analysts vary in their explanations of the price increases. One factor cited is that winter in the US was colder than usual, though this became less relevant as spring approached. Another reason is the continued growth in world demand, helped by the stellar growth of India and China. Finally, the dollar continues to slump against the euro. Since oil is traded in dollars, the price must increase for OPEC to maintain buying power in Europe. Some analysts conclude from this that the increases are permanent and prices may go much higher. Goldman Sachs released a report predicting that prices could hit $100 at some unspecified date. The Strategic Petroleum Reserve (SPR) is an emergency petroleum store maintained by the United States Department of Energy. ... The Goldman Sachs Group, Inc. ...


In April 2005 the price began to fall, reaching $53.32 on April 9. It then reversed course and headed to an all time high of $58.28, driven mainly by lingering concerns of a prolonged weak dollar.


In June 2005, the Bush administration announced that the Strategic Petroleum Reserve was full, and that the ending of federal oil stockpiling would increase supply and temporarily ameliorate fuel prices. However, crude oil prices surged to record highs eventually breaking the psychological barrier of $60. The Strategic Petroleum Reserve (SPR) is an emergency petroleum store maintained by the United States Department of Energy. ...


King Fahd's death in August 2005 meant a new regime that may be less amenable to US influence. Upward pressure on prices was the result, and new record highs were reached. King Fahd of Saudi Arabia King Fahd bin Abdul Aziz (born in Riyadh in 1923) is the king and prime minister of Saudi Arabia and leader of the House of Saud. ... US,Us or us may stand for the United States of America us, the oblique case form of the English language pronoun we. ...


Effects

There is controversy regarding the potential effects of oil-price shocks. Some see these increases in the price of oil leading to a recession comparable to those that followed the 1973 and 1979 energy crises. Other economists see this as unlikely, partly because all developed countries have high fuel taxes that decrease as oil prices increase and can be eliminated in the event of a dramatic price spike. Nevertheless, such subsidies place a significant strain on government balance sheets. The American Strategic Petroleum Reserve could on its own supply current U.S. demand for about a month in the event of an emergency. (Redirected from 1973 energy crisis) United States, drivers of vehicles with odd numbered license plates were allowed to purchase gasoline only on odd-numbered days of the month, while drivers with even-numbers were limited to even-numbered days. ... Oil prices from 1860-1999 in 1999 dollars. ... The Strategic Petroleum Reserve (SPR) is an emergency petroleum store maintained by the United States Department of Energy. ...


While total consumption has increased [5], the western economies are considered by some to be less reliant on oil than they were twenty-five years ago, due to substantial growths in productivity. In the United States, for instance, each $1000 dollars in GDP required 2.4 barrels of oil in 1973 when adjusted for inflation this number had fallen to 1.15 by 2001. But oil's historically high ratio of Energy Returned on Energy Invested continues a significant decline. EROEI (energy returned on energy invested) is the ratio between the amount of energy expended to obtain a resource, compared with the amount of energy obtained from that resource. ...


Economists say that the substitution effect will spur demand for alternate energy sources, such as coal or liquified natural gas, but the dual spectres of geopolitical strife and peak oil production continue to loom over supply. Differences of opinion regarding effects are outlined in a recent discussion[6] prompted by the blogging of University of Californina-San Diego professor James Hamilton: Consumer theory relates preferences, indifference curves and budget constraints to consumer demand curves. ... Alternative fuel is any method of powering an engine that do not involve petroleum (oil). ... Coal is a fossil fuel extracted from the ground either by underground mining, open-pit mining or strip mining. ... Liquified Natural Gas (LNG) is natural gas which has been artificially condensed into a liquid form by a combination of pressurisation and cryogenic cooling. ... The Hubbert peak theory, also known as peak oil, is an influential theory concerning the long-term rate of conventional oil (and other fossil fuel) extraction and depletion. ... The University of California, San Diego (popularly known as UCSD) is a public, coeducational university located in La Jolla, California. ...

I for one would like to see better communication between economists, geologists, and petroleum engineers about the timing and consequences of the eventual decline in global annual production rates of crude petroleum. In part the failure to communicate better with each other stems from differences in the language, assumptions, and paradigms with which those of us from different specialties approach this issue.

In the United States, the Consumer Price Index rose by 0.6% compared to 0.2% for September. This was driven by a 4.2% increase in energy costs. In economics, the Consumer Price Index (CPI, also retail price index) is a statistical measure of a weighted average of prices of a specified set of goods and services purchased by wage earners in urban areas. ... September is the ninth month of the year in the Gregorian Calendar and one of four Gregorian months with the length of 30 days. ...


See also

An energy crisis is any great shortfall (or price rise) in the supply of energy to an economy. ... (Redirected from 1973 energy crisis) United States, drivers of vehicles with odd numbered license plates were allowed to purchase gasoline only on odd-numbered days of the month, while drivers with even-numbers were limited to even-numbered days. ... Oil prices from 1860-1999 in 1999 dollars. ... The 1990 (or third) energy crisis was the mildest and most brief of them all. ... This is a list of notable recessions, depressions and downturns. ... The Hubbert curve, named after the geophysicist M. King Hubbert, is the derivative of the logistic curve. ... The Hubbert peak theory, also known as peak oil, is an influential theory concerning the long-term rate of conventional oil (and other fossil fuel) extraction and depletion. ... Nodding donkey pumping an oil well near Sarnia, Ontario, 2001 Petroleum (from Latin petra – rock and oleum – oil), crude oil, sometimes colloquially called black gold, is a thick, dark brown or greenish flammable liquid, which exists in the upper strata of some areas of the Earths crust. ... The theory of abiogenic petroleum origin states that petroleum (or crude oil) is primarily created from non-biological sources of hydrocarbons located deep in the Earth. ...

External links


  Results from FactBites:
 
History and Analysis -Crude Oil Prices (3298 words)
In 1972 the price of crude oil was about $3.00 per barrel and by the end of 1974 the price of oil had quadrupled to over $12.00.
The higher prices faced by consumers would have resulted in lower rates of consumption: automobiles would have had higher mileage sooner, homes and commercial buildings would have been better insulated and improvements in industrial energy efficiency would have been greater than they were during this period.
The price of crude oil spiked in 1990 with the uncertainty associated Iraqi invasion of Kuwait and the ensuing Gulf War, but following the war crude oil prices entered a steady decline until in 1994 inflation adjusted prices attained their lowest level since 1973.
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