Topics: Petroleum, OPEC, Diesel fuel Pages: 6 (1857 words) Published: February 25, 2014
Oil prices continue lower after EIA supply data
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By Myra P. Saefong
SAN FRANCISCO (MarketWatch) - Oil futures continued to trade lower Wednesday, though pared some losses briefly after the U.S. Energy Information Administration reported a fall of 1.4 million barrels in crude stockpiles for the week ended Aug. 16. Analysts polled by Platts were looking for a 1 million-barrel decline. Gasoline supplies dropped by 4 million barrels, while distillate stockpiles rose 900,000 barrels, the EIA said. Gasoline stockpiles were expected to decline by 1.5 million barrels, while forecasts called for an increase of 1 million barrels for distillates. Following the latest data, October crude traded at $104.56 a barrel on the New York Mercantile Exchange, down 55 cents, or 0.5%. It was trading at $104.74 shortly before the report. It climbed closer to $105 right after the data, then fell back toward the session's lows. Read the full story:

Oil falls below $105 ahead of Fed minutes Arab Oil Embargo of 1973 Description:
In 1973, several Arab nations, angered at U.S. support of Israel in the 1973 Arab-Israeli War, instituted an oil embargo against the United States and Holland. The Arab oil embargo came at a time of declining domestic crude oil production, rising demand, and increasing imports. The embargo was accompanied by decreased OPEC production, and with minimal global excess production capacity available outside OPEC, created short-term shortages and price increases. (7) When Arab production was restored and the embargo lifted six months later, world crude oil prices had tripled from the 1973 average to about $12 per barrel, and OPEC was firmly in control of the world oil market. Industry Action/Reaction:

U.S. refiners made short-term changes in oil purchasing and began importing crude oil from any available source. About 30 percent less of the more costly crude oil was imported during the embargo. Iran at the time appeared to be a stable, long-term source. Iran moved to expand sales to the United States, and these imports served to offset losses from Kuwait and Libya until Libyan crude oil imports resumed in early 1975. •Imports from other Arab OPEC countries resumed shortly after the embargo ended in March 1974, and continued to climb through 1977. Despite production buildups from the North Sea and Alaska, Arab OPEC's share of U.S. crude oil imports increased from nearly 26 percent in 1973 to 36 percent in 1977, when imports were than at historic high levels which were not again reached until 1994. •The refining industry moved to develop technology and processing methods to reduce fuel consumption and to increase operating efficiency. Results:

The embargo caused sudden price hikes and short-term shortages of refined products after decades of ample supplies and growing consumption. Tight supplies caused lines to form at gasoline stations. All petroleum products were much more costly. From 1972 to 1975, when OPEC restored output to pre-embargo levels, consumers were paying approximately 57 percent more for leaded regular gasoline and 91 percent more for home heating oil. (8) These increases reflect the increase in world oil prices over the period. The large jump in energy prices is widely considered to be a cause of the economic recession that occurred in 1974 and 1975, though some later economic studies indicate that other factors may have contributed. (9) •Various efforts were undertaken to conserve energy and to switch from petroleum to less expensive alternative fuels. Petroleum consumption declined both in 1974 and 1975 as a result of conservation efforts.(10) Alternative fuels in some industrial and electric utility facilities replaced large volumes ofdistillate fuel oil and residual fuel oil. •To plan for future supply disruptions and to establish...
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