Trends in Oil Prices
Months of data to display |
|||||
 |
 |
 |
 |
 |
 |
| Crude Oil Prices |
|---|
| Comparison of Prices of Gasoline and Crude (in gallons) |
| Spreads across Refined and Unrefined |
Yesterdays Numbers($)
| -1.00 | Brent Crude |
| -1.00 | Light Sweet Crude |
| -1.00 | Unleaded Gasoline (NYHarbor) |
| 0.00 | Spread across Brent and Light Sweet |
| -0.02 | Price of a gallon of Light Sweet Crude |
| 41.00 | Spread btwn bbl Unleaded and bbl Sweet Crude |
Comments & Explanations
The data here is taken from public website pages once a day at 4am EST. I do occasionally change the source, but generally over the last 24 months it has been Bloomberg data. The data is stored in a database. I have about 5 years of data.
The Crude prices are per Barrel (bbl), while the NY Harbor gasoline price is per gallon.
The first graph shows Crude Oil prices. The second a comparison of Texas Light Sweet to gasoline (the crude converted to gallons). The third graph shows the spreads between unrefined crude's and the refined gasoline.
The spread between a bbl of gasoline and a bbl of Texas light sweet crude is the refiners cut.
Info on where oil comes from in the world (to the USA) can be found here [Department of Energy website]. This identifies that using 2003 numbers, only 20% of US Oil imports came from the Middle East. While the US has limited its exposure to Middle East politics,it has opened it to other issues, such as current Venezuelan dislike of US policies, and Nigerian oil strikes.
Current Issues
This is my personal take on some of the issues affecting oil prices and how that may influence the oil price [Up, Down, etc].
Short Term
- Fairly stiff winter across the northern States (up)
Long Term
- Global economic situation (DOWN)
- New President, and a new less aggressive approach to foreign affairs (down)
- Iraq War duration and Iraqi oil production shortfalls (Up)
- OPEC production cuts (Up)
- Inability of US politicians to get their act together and sort out domestic exploration issues (Up)
- Growing interest in Alternatives (Energy conservation, Biofuels, Emissions controls, Alternative sources) (down)
Winter 2009
How things have changed! Since the Summer of 2008, the price of oil has collapsed; down from a high of around $146/bbl to a short lived low of about $35/bbl, though now back up to $46/bbl-ish. The economics of this are impressive. Where last year we feared inflation and prices were surging on many oil impacted products, this year we are talking about deflation, because the cost of oil has to be taken out of these same products. So transportation costs are falling due to lower fuel costs, though I dare say the actual prices charged are not moving down nearly as fast as they went up. The cost of next years crops will be affected too, as much fertilizer is manufactured from oil, and those reduced transportation costs will affect transporting seed to farms, sowing, harvesting, and moving the produce to market.
Offsetting all this is that the Oil companies are freezing many projects they had started on the production of oil from marginal fields. This means the period of maximum production of oil is not going to be stretched anytime soon. It will take much effort to restart these marginal field projects.
The economic misery that afflicts the world at the moment will pass. When it does, the price of oil is going to make a move north again. Depending on just how the economic rebuilding goes, that price increase could be gentle or very rapid. Expect oil production shortfalls if the economies of the world come back anything like quickly. The current price range is not sustainable, it will go above $50/bbl again, and probably in the near future. Could we see $100/bbl by year end? Probably not, but don't count it out in 2010.
One odd anomally in the pricing at the moment is the difference between pump prices and crude oil prices. Because the economy has been backing off so quickly, the refineries have managed to generate a large reserve of refined product. This has caused some artificially low prices to appear on pumps at gas stations. This will not last, and may end artificially quickly, if the refiners decide to forgo the full length of winter production and switch early to doing summer oils. This may cause prices to pop later in the winter, heading into spring, before things balance out at the end of spring/start of summer.
The current interest in electric cars, and higher fuel economy vehicles in general, could begin to have an impact in annual oil consumption here in the USA. However, given the potential size of the new industrial countries markets for fuel, this will probably have an unmeasurable impact on pump prices here or anywhere else - prices will just go up. However, the mindset change could have an impact on the public perception of the need for oil products. Expect the oil companies to try and persuade you to use oil products in new ways. Expect to be bombarded by advertising.
AM. January 24th 2009