Even more price records, new refineries and a technical hitch at the IPE

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
In a final burst before retreating, oil prices once again entered record territory. WTI went to $58.28 a barrel, while Brent shot up to $57.65. In Asia, meanwhile, Malaysia's benchmark Tapis grade climbed above $61.00. The scramble to buy crude oil finally began to show up in stock levels, however, and US inventory figures showing an 8% year-on-year rise at the start of April suggested that fears of a crude oil shortage were overplayed. Prices fell sharply leaving Brent and WTI just above $51.00 a barrel. An announcement by OPEC's president, Ahmad Fahad Al Sabah, that the cartel would produce an additional 500,000 bpd in May helped to relax fears further. Product prices remained relatively more robust on a combination of high demand in the US and Asia and unscheduled refinery maintenance in the US.     

No OPEC increase, Iraqi output up and Mexican exports down

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices fell back early in December as fears grew that high prices were about to push the US and other markets into recession. Brent fell back below $90/bbl ( see 'Oil Price Review') but the fall proved only temporary and prices began to rise sharply towards the end of the year. OPEC ministers did nothing to ease market fears when, at their meeting on 5th December in Abu Dhabi, they decided to leave the organization's output ceiling unchanged at 27,253,000 bpd. The ministers rejected calls from consuming countries to produce more oil, declaring in their communiqué that the market was "well-supplied", with stocks at "comfortable levels". The high level of prices was blamed on what the communiqué called "speculative activity" by financial funds and others. Angola and Ecuador were brought into the production-sharing system, being given output quotas respectively of 1.9 mn bpd and 520,000 bpd.     

Record prices

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Crude oil prices climbed to new record levels on fears of a future loss of supplies from Iran as Washington stepped up its efforts to persuade Tehran to abandon its programme to produce nuclear fuel. IPE's December Brent contract set a new record for the exchange by trading at $75.80/bbl on 21st April. On the same day October WTI reached an all-time high of $77.30/bbl on Nymex. US product prices gained as refiners struggled to produce sufficient middle distillate. Alarmed by the rising retail price of gasoline, the US Senate debated a reduction in the already low US tax rate on motor spirit. The House of Representatives passed a measure to prohibit overcharging for petrol, diesel and heating oil, but Democrats rejected a Republican proposal to speed-up the process for approving new refineries. President George W Bush announced a temporary easing of new gasoline and diesel specifications ( see 'Focus', March 2006 ) to allow more fuel to be produced. He also agreed to delay the repayment of some 2.1 mn bbl of crude oil lent to companies after last year's hurricanes from the Strategic Petroleum Reserve. California announced an inquiry into alleged overcharging for fuel by oil companies operating in the state.     

Price records, violence and dollar weakness (the usual mix)

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices went to new record levels in mid-March as traders contemplated the usual mix of violence in Iraq and Nigeria along with a falling US dollar, allied in this instance with a rise in the gold price above $1,000 an ounce and the paradoxical combination of fears of a world recession and high demand for oil products. The result was WTI front-month futures at an intra-day high of $111.80/bbl on 17th March, following a record $110.30/bbl in the cash market for prompt barrels set four days earlier. The 13th of March also saw Dated North Sea at a record $108.93/bbl, with prompt Brent some $2/bbl above this level. OPEC's price-basket also rose above $100/bbl for the first time. Many product prices also moved into record territory, including an intra-day high of $3.22/gall for Nymex spot heating oil on 14th March. The increases proved too much in the end and crude markets were back below $100/bbl by the end of the month.     

Still more records, Iraqi violence and Caspian exports

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices set further records at the start of May before falling back. December WTI hit an all-time high of $78.00/bbl on Nymex on 3rd May. IPE November Brent went up to a record $76.45/bbl. Both contracts eventually settled lower and prices in general weakened before staging a minor rally at the end of the month. Other price records were broken early in the month. In Asia, the Indonesian marker grade, Minas, was recorded at $74.04/bbl on 2nd May, whilst Malaysia's Tapis went above $76.70/bbl. Strong Asian demand also boosted the prices of West African crudes. The markets appeared to be reacting to growing tensions in Iraq, Iran and Nigeria. These considerations returned to haunt the markets later in the month. All crude oil loadings at Iraq's Persian Gulf marine terminal were suspended following a fire, though the main Gulf terminal at Basrah continued to operate. The Ceyhan terminal remained out of action. Tensions between the US and Iran over the latter's nuclear programme gave rise to fears of an embargo on Iranian oil exports. Several foreign oil workers were kidnapped following an armed attack on oil installations in Nigeria. OPEC ministers kept their production ceiling unchanged at 28 mn bpd at a meeting in Caracas.     

Jet fuel squeezed as gasoil demand booms

As the US summer gasoline season begins ( see 'The Month in Brief') it is not gasoline but middle distillate that is driving product prices in that country. Fears of a heating oil shortage next winter have pushed the price of heating oil above that of motor spirit. Diesel prices have been above those of gasoline for several weeks. Strong demand for diesel and heating oil is predicted for the rest of the year, and US refiners will have to try and structure their operations so as to maximize their output of these two fuels whilst still continuing to keep the world's largest gasoline market adequately supplied. The main effect of these attempts to squeeze more gasoline, diesel and heating oil from the crude oil barrel is likely to be experienced by the product that lies in the middle: jet kerosine.     

Bombs, hurricanes and more chaos in Iraq

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
The oil market's roller-coaster continued into July with rising prices for US gasoline ahead of the 4th July holiday and a jump in prices for WTI on fears of hurricane damage to US Gulf production. August Nymex gasoline settled at a record $1.8056/gall on the 7th July as figures were released showing US demand at record weekly levels. On the same date, a series of fatal terrorist bomb attacks in London propelled IPE Brent to its highest-ever level of $60.70/bbl whilst, in Asia, Dubai traded at an all-time high of $55.80/bbl. The market's strength rapidly proved to be evanescent. Within hours of the London bombings, Brent had given up $5.00/bbl. Crude oil and gasoline prices eased in subsequent days and middle distillate lost some of its recent strength relative to gasoline as US stock figures showed a steady improvement in inventory levels. Volatility returned towards the end of the month on worries about gasoline shortages in both the US and Europe and more price records fell on 1st August on news of the death of King Fahd of Saudi Arabia. WTI gained $1.00 on the day, settling at a record $61.57/bbl on Nymex, having been even higher during the day's trading, at $62.30/bbl. On the IPE in London, Brent rose to its highest-ever intra-day level of $60.98/bbl, before settling slightly lower. Some product prices also went into previously uncharted territory: notably jet fuel in North West Europe, which went above $600/t.     

Hurricane in US, chaos in Iraq and even more price records

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
A hurricane named Katrina devastated oil installations along the US Gulf Coast as well as the city of New Orleans, sending oil prices to new record levels. Nearly 1.4 mn bpd of offshore oil production was shut-in, along with 8.3 bn cfd of the Gulf's natural gas. More production was closed down onshore along with nearly 2.4 mn bpd of refining capacity. Crude and product prices shot up worldwide. The 30th August saw October WTI close at a record $69.81/bbl, having traded earlier in the day up to $70.85/bbl. On 31st August, Nymex gasoline closed at a new high of $2.6145/gall as the Gulf Coast's refineries remained off-line. Gulf spot prices rose above $3/gall. The following day, October heating oil set a new record by closing at $2.1985/gall. Records fell outside the US, with Tapis at $70.97 on 31st August. The previous day saw IPE October Brent settle at a record $67.57, whilst the November and December contracts both saw trades above $69.00/bbl. Natural gas prices also moved into record territory in the US, topping $12 per mn BTU on Nymex during the morning of 30th August.     

OPEC quotas unchanged, Nigeria won't sell crude and Iran can't

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices approached record levels as fears grew of a cut in production by OPEC. Partly in response to such fears, OPEC's ministers agreed in Vienna on 31st January to leave output quotas unchanged at 28 (for details of individual country quotas, see GER 'Latest Developments', July 2005). Prices fell on OPEC's decision, but futures prices for the outer months of Brent and WTI remained firm on continuing concerns of tight supplies. Market fears were primarily concentrated on Nigeria and Iran. In Nigeria, a series of incidents, including sabotage to oil installations and the killing of oil workers, led to the interruption of exports ( see 'Focus'). There were further fears of an interruption to Iranian oil exports as a result of the growing tension over Iran's nuclear programme. US President, George W Bush increased the tension when, in his State of the Union Message, he called the government there repressive. He also called on the US to make itself less dependent on Middle Eastern oil ( see GER 'Latest Developments'). Iran was reported to have assured the rest of OPEC that there would be no interruption to its oil exports as part of its dispute with the US and others; but many traders remained nervous. Some oil ministers added to market fears by calling for OPEC to cut production in support of oil prices at the cartel's next meeting, which is due on 8th March. For all the fears of oil shortages, Iran was forced to place 19of oil in storage, having failed to sell it on the international market.     

More price records, more unrest and more refineries

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices continued to set new records despite a decision by OPEC to raise production by 0.5 mn bpd to 27.5 mn bpd from 16th March. On 1st April, WTI futures in New York set a new closing high of $57.27 a barrel, having traded earlier in the day at $57.70. IPE Brent remained just below its previous record, touching $56.15. Crude oil's strength pushed the official prices of some Asian crudes to record levels, including Malaysia's benchmark Tapis grade, which was set at $58.89 a barrel. Product prices rose to new highs as well. In New York, May heating oil reached $1.6638/gall and May gasoline settled at $1.7310 on 1st April, while, in Europe, gasoline rose to an all-time high of $558/t. The market's view on OPEC's decision was that the rise in output was too little, too late. Even a statement by the cartel's President, Shaikh Ahmad Fahd Al Sabah, that OPEC would consider a further rise of 0.5 mn bpd for May did nothing to calm fears.     

Economics, fundamentals, technology, finance, speculation and geopolitics of crude oil prices: an econometric analysis and forecast based on data from 1990 to 2017

It is of real and direct significance for China to cope with oil price fluctuations and ensure oil security. This paper aims to quantitatively analyze the specific contribution ratios of the complex factors influencing international crude oil prices and to establish crude oil price models to forecast long-term international crude oil prices. Six explanatory influential variables, namely Dow Jones Indexes, the Organization for Economic Cooperation and Development oil stocks, US rotary rig count, US dollar index, total open interest, which is the total number of outstanding contracts that are held by market participants at the end of each day, and geopolitical instability are specified, and the samples, from January 1990 to August 2017, are divided into six sub-periods. Moreover, the co-integration relationship among variables shows that the contribution ratios of all the variables influencing Brent crude oil prices are in accordance with the corresponding qualitative analysis. Furthermore, from September 2017 to December 2022 outside of the sample, the Vector Autoregressive forecasts show that annually averaged Brent crude oil prices for 2017–2022 would be $53.0, $61.3, $74.4, $90.0, $105.5, and $120.7 per barrel, respectively. The Vector Error Correction forecasts show that annual average Brent crude oil prices for 2017–2022 would be $53.0, $56.5, $58.5, $60.7, $63.0 and $65.4 per barrel, respectively.     

Chinese bid for Unocal sparks fears of global clash over energy resources

A bid by China's state-owned offshore oil company for a privately-owned US upstream corporation has raised fears of a Chinese takeover of several other foreign companies as Peking tries to secure oil and gas reserves to fuel the country's booming economy. The China National Offshore Oil Corporation (CNOOC) has offered $19.6 bn for the California-based company, Unocal, the eighth-largest upstream company in the US in terms of reserves. The bid trumps an earlier one of $18.4 bn by US major Chevron, which had been accepted by Unocal's board and appeared to have the backing of many leading political figures in the US.     

Another hurricane, high prices and more chaos in Iraq

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Another hurricane, this time called Rita, battered the US Gulf Coast, sending oil prices up worldwide, though not to the heights seen when its predecessor, Katrina, arrived. As before, a large swathe of US refinery capacity was temporarily put out of action: this time mainly in Texas. For around a week in late September, when Rita arrived, nearly 4.1 mn bpd of crude distillation capacity was taken off-line. At the same time, some 0.9 mn bpd was still unusable as a result of the depredations of Katrina in late August, leaving the US briefly minus nearly one third of its refinery capacity. The situation improved as some capacity was brought slowly back on-line, but by the beginning of October around 3.0 mn bpd was still not back in operation. The main price effects of Katrina were on gasoline, prompting demands in the Congress and elsewhere for investigations into overcharging by refiners and retailers ( see 'Focus'). A record weekly increase in the first week of September propelled the average price of regular gasoline across the US to $3.07/gall. Rita's principal effect was on heating oil, which went up in the last week of September by nearly 20% to $2.51/gall in the US Gulf. US crude oil prices remained below their immediate post-Katrina record highs ( see 'The Month in Brief', September 2005 ) despite the loss of the entire 1.5 mn bpd production in the Gulf of Mexico following Rita's arrival.     

More price records, OPEC produces more and Iraq exports less

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Oil prices surged to new highs as Norwegian oil workers threatened to strike. WTI futures settled at a record $60.54/bbl on 27th June while, on the same day, heating oil broke through all previous records on Nymex to reach $1.6761/gall. August IPE Brent remained just below the $60 mark, but the October and November contracts both closed above $60/bbl for the first time, with November the higher of the two at $60.58/bbl. These new price levels proved unsustainable as many traders cashed-in their profits to close-out the second quarter. The record prices appeared not to indicate any actual shortage of crude oil. US imports touched 10.97 mn bpd in the week-ending 24th June: the second-highest on record. As if accepting this as proof that it was producing sufficient crude oil, OPEC shelved plans to discuss a possible 0.5 mn bpd increase in quotas to 28.5 mn bpd. The cartel had earlier decided that it would raise its output ceiling from 27.5 mn bpd to 28.0 mn bpd with effect from 1st July, at its meeting in Vienna on 15th June.     

Another hurricane, more refineries and strikes

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Another hurricane - this time called Wilma - interrupted oil supplies to the US. Whilst the storm itself generally avoided the US, it damaged marine installations at the Bahamas Oil Refining Company's terminal which supplies up to 200,000 bpd of low sulphur fuel oil (LSFO) to the US and Puerto Rico. The loss of supplies from BORCO comes at a bad time for US electricity generators, several of which have been switching out of gas into LSFO following the spike in gas prices caused by damage to US Gulf production following previous hurricanes ( see 'The Month in Brief', September 2005 ). Another major supplier of LSFO, Brazil, has cut deliveries to the US, diverting 45,000 bpd to Argentina, where a shortage of natural gas has increased demand for fuel oil. LSFO is not the only concern for US consumers. Refinery shutdowns in the US Gulf mean that the US is short of middle distillate going into the winter heating season. The Bush administration is now considering the establishment of a series of regional product reserves across the United States. The stocks would be held at refineries and would be sufficient to cover a loss of gasoline and middle distillate supplies lasting for five days.     

Prices high, tensions ease and a new OPEC is formed

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Crude oil prices rose on news that BP was to shut-in its 400,000 bpd Prudhoe Bay field, following the discovery of corrosion in a pipeline serving the field. Dated BFO went to a record high of $78.72/bbl on 8th August. Speculation that refiners on the US West Coast would seek to replace the lost Alaska North Slope crude with supplies from the Asia/Pacific region caused prices to rise there as well. US crude prices were rather less affected than elsewhere by events in Alaska as it rapidly became clear that stock levels were sufficient to deal with any loss of production. It also emerged that BP was able to keep about half of Prudhoe Bay in production. By that time, however, oil markets had latched on to an entirely different source of worry. The announcement in London that police had uncovered a plot to blow-up aeroplanes crossing the Atlantic led to concerns of a sharp fall in passenger travel. Traders were not simply worried about the effect of this on the demand for jet fuel, but expressed concerns of a more general loss of business confidence across the world. Fears over a fall in jet fuel consumption did not appear to have spread to Singapore, where jet kerosine traded at an all-time high of $91.75/bbl early in August.     

More price records, Iraq's exports rise and the US probes mogas prices

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
More oil price records were set as refiners worried about supply and inventory levels and other buyers took advantage of a falling US dollar to stock-up on oil and other commodities. October WTI briefly touched $84.10/bbl on 20th September. The US benchmark gained more than most crudes on fears of disruption to oil production in the US Gulf with the arrival of Hurricane Humberto. Some 1.3 mn bpd of production was temporarily shut-in as a precaution, though in the end there was no damage to offshore installations. North Sea crudes rose sharply the following week, pushing IPE Brent into record territory on 28th September, when the London benchmark rose above $81.00/bbl . The new records came despite a decision by OPEC on 11th September to increase its output by 500,000 bpd between August and November. The November target is 27.25 mn bpd, compared with February 2007's level of 25.80bpd. Iraq and Angola are outside the quota system, though Angola is set to join it in the near future.     

Gasoline records, Nigerian troubles and security problems

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'.
Gasoline reached record prices in the US as inventories fell and demand rose. Average retail prices hit $3.11/gal in mid-month before falling slightly. Supplies were squeezed by a series of unexpected refinery shutdowns and problems were reported meeting new fuel specification ( see 'Focus', March 2006 ). Partly in response to the lower than expected refinery runs, the price differential of WTI fell to a record $6.30/bbl below BFO. The US remained generally oversupplied with crude oil despite the temporary loss of 100,000 bpd of Alaska North Slope (ANS) production in yet another disruption to BP's operations there ( see 'The Month in Brief', November 2006 ). President George W Bush meanwhile declared that federal government departments must investigate further ways of improving US energy efficiency.     

Oil prices in 2005: reading the runes

The year 2004 ranks alongside 1973 and 1979 as one of the most dramatic in the history of oil. As in the other two oil shocks, oil prices rose to unprecedented heights and the year ended with markets in a state of nervous uncertainty. Between early February and late October the prices of most crudes rose by nearly 80%, pushing many of the key reference grades above $50.00 a barrel for the first time ever. On Friday 22nd October, West Texas Intermediate (WTI) crude was quoted at $56.30, whilst on the same day Brent reached $52.15. The following Monday, Malaysia's Tapis blend hit $55.50.     

Economic Performance of China’s Oil and Petrochemical Industry in First Quarter

International oil price continued souring in the first quarter of 2008. It was bouncing up and down above $100/barrel and even getting close to $120/barrel by the end of April. Products related to energy and resources all responded with higher prices, triggering a general increase in cost of petroleum and petrochemical industry. World＇s economy was seriously affected by USA＇s subprime lending crisis, weakening US dollar, sullen stock markets, and etc, major economies lowered their expectations for economic growth rate. China also stipulated a series of adjusting policies, such as policies concerning labor costs, environment protection, export tariff rebate, and so on. Influences by the combination of the situation and new policies, plastic products and textile and other labor extensive sectors for export witnessed reduction of export and some petroleum and petrochemical products were over supplied than actually demanded.