Oil & Gas Price Evolution
What Moves the Oil and Gas Price?
Why are oil prices and gas prices so dramatically increased in the last view years? Oil and gas price will maintain the current level or rise in the next years because of the world economy, an increased demand on oil and its production costs, the gas demand, and the investment in developing alternative energy sources.
How long will the oil reserves last?
It is currently estimated that the oil reserves in the United States will last for 20 to 30 years, but this may or may not be accurate For example, since the first oil price shocks in the seventies, a many actions have been taken in order to reduce the consumption of oil and to reduce energy
The reality is, that the world oil demand is forecasted to grow in 2009. “World oil demand is forecast to grow by 0.9 Millions of Barrels per Day (mb/d) in 2009, averaging 87.71 mb/d which is 0.1 mb/d lower than in the current year.” (OPEC, Monthly oil market report, July 2008 p. 3). This report indicates that we expect a slow down in the years after 2009. Assumptions for this oil demand forecasts are; the Worlds Gross Domestic Product (GDP) grow will slow down compared to 2008, we expect normal weather and the energy-price as well as the demand of elasticity will strengthen worldwide. The higher oils and gas prices will reduce this demand by utilization of nuclear power plants, adding biofuel and moving towards use of smaller and economical vehicles. The industrial oils usage is balanced with the economic growth.
The oil market report stated:
Slowing demand for gasoline particularly in the US, combined with an easing in the distillate markets and costly crude have exerted pressure on refining economics across the world. The continuation of these trends may encourage refiners to cut throughputs or begin seasonal maintenance earlier than usual, which would trim crude demand. This could lead to further crude stock-builds in the coming months, putting
Why are oil prices and gas prices so dramatically increased in the last view years? Oil and gas price will maintain the current level or rise in the next years because of the world economy, an increased demand on oil and its production costs, the gas demand, and the investment in developing alternative energy sources.
How long will the oil reserves last?
It is currently estimated that the oil reserves in the United States will last for 20 to 30 years, but this may or may not be accurate For example, since the first oil price shocks in the seventies, a many actions have been taken in order to reduce the consumption of oil and to reduce energy
The reality is, that the world oil demand is forecasted to grow in 2009. “World oil demand is forecast to grow by 0.9 Millions of Barrels per Day (mb/d) in 2009, averaging 87.71 mb/d which is 0.1 mb/d lower than in the current year.” (OPEC, Monthly oil market report, July 2008 p. 3). This report indicates that we expect a slow down in the years after 2009. Assumptions for this oil demand forecasts are; the Worlds Gross Domestic Product (GDP) grow will slow down compared to 2008, we expect normal weather and the energy-price as well as the demand of elasticity will strengthen worldwide. The higher oils and gas prices will reduce this demand by utilization of nuclear power plants, adding biofuel and moving towards use of smaller and economical vehicles. The industrial oils usage is balanced with the economic growth.
The oil market report stated:
Slowing demand for gasoline particularly in the US, combined with an easing in the distillate markets and costly crude have exerted pressure on refining economics across the world. The continuation of these trends may encourage refiners to cut throughputs or begin seasonal maintenance earlier than usual, which would trim crude demand. This could lead to further crude stock-builds in the coming months, putting
References: Hoyos C. (September 8, 2008). Opec ponders when to cut oil output in effort to boost price. Retrieved September 12, 2008, Financial Times, from Web site http://www.ft.com/cms/s/0/c7d09570-7d3c-11dd-8d59-000077b07658.html OPEC. (2008). The Organization of the Petroleum Exporting Countries. Retrieved August 10, 2008, from http://www.opec.org/aboutus/history/history.htm The Economic Times (September 10, 2008). Oil prices rebound after OPEC output cut. Retrieved September 12, 2008 from Web site http://economictimes.indiatimes.com/%20News/%20International_Business/%20Oil_prices_rebound_after_OPEC_output_cut/articleshow/%203465594.cms Semmler, W. (2006). Asset Prices, Booms and Recessions: Financial Economics from a Dynamic Perspective. Berlin and Heidelberg: Springer-Verlag GmbH & Co. KG. Sullivan, B. (June 19, 2008). Real Impact of Gas Prices on Economy. Retrieved August 10, 2008, Fox Business from Web site: http://briansullivan.blogs.foxbusiness.com/2008/06/19/real-impact-of-gas-prices-on-economy.htm US Energy Information Administration, (2007). World Proved Reserves of Oil and Natural Gas. Retrieved August 10, 2008, from http://www.eia.doe.gov/emeu/international/reserves.html Williams, James L. (May 2008). Crude Oil Prices. Retrieved August 10, 2008, WTRG Economics, from Web site: http://www.wtrg.com/prices.htm