World oil market chronology from 2003

From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by RjwilmsiBot (talk | contribs) at 07:03, 14 May 2011 (CiteCompletion, dates: 2, authors: 2, using AWB (7701)). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

This article is a chronolgy of events affecting the oil market. For a discussion of the energy crisis of the same period, see 2000s energy crisis and Effects of 2000s energy crisis. For current fuel prices see Gasoline usage and pricing.
Short term crude oil prices, (not adjusted for inflation)

From the mid-1980s to September 2003, the inflation adjusted price of a barrel of crude oil on NYMEX was generally under $25/barrel. Then, during 2004, the price rose above $40, and then $50. A series of events led the price to exceed $60 by August 11, 2005, and then briefly exceed $75 in the middle of 2006. Prices then dropped back to $60/barrel by the early part of 2007 before rising steeply again to $92/barrel by October 2007, and $99.29/barrel for December futures in New York on November 21, 2007.[1] Throughout the first half of 2008, oil regularly reached record high prices. On February 29, 2008, oil prices peaked at $103.05 per barrel,[2] and reached $110.20 on March 12, 2008,[3] the sixth record in seven trading days.[4][5] Prices on June 27, 2008, touched $141.71/barrel, for August delivery in the New York Mercantile Exchange (after the recent $140.56/barrel), amid Libya's threat to cut output, and OPEC's president predicted prices may reach $170 by the Northern summer.[6][7] The most recent price per barrel maximum of $147.02 was reached on July 11, 2008.[8] After falling below $100 in the late summer of 2008, prices rose again in late September. On September 22, oil rose over $25 to $130 before settling again to $120.92, marking a record one-day gain of $16.37. Electronic crude oil trading was temporarily halted by NYMEX when the daily price rise limit of $10 was reached, but the limit was reset seconds later and trading resumed.[9] By October 16, prices had fallen again to below $70, and on November 6 oil closed below $60.[10]

As the price of producing petroleum did not rise significantly, the price increases have coincided with a period of record profits for the oil industry.[citation needed] Between 2004 and 2007, the profits of the six supermajors - ExxonMobil, Total, Shell, BP, Chevron, and ConocoPhillips - totaled $494.8 billion.[11]

History

Template:Globalize/USA

Operation Iraqi Freedom

United States crude oil prices averaged $31 a barrel in 2003 due to political instability within various oil producing nations. It rose 19% from the average in 2002.[12] The 2003 invasion of Iraq marked a significant event for oil markets because Iraq contains a large amount of global oil reserves.[13] The conflict coincided with an increase in global demand for petroleum, but it also reduced Iraq's current oil production and has been blamed for increasing oil prices.[14] However, oil company CEO Matthew Simmons emphasizes the peaking and decline of oil-exporting in Mexico, Indonesia and the United Kingdom is the reason for the price gouging. According to Simmons,[15] isolated events, such as the Iraq war, affect short-term prices but do not determine a long-term trend. Simmons cites the use of enhanced oil recovery techniques in large fields such as Mexico's Cantarell,[15] which maintained production for a few years until it eventually declined. Pumping oil out of Iraq may reduce petroleum prices in the short term, but will be unable to perpetually lower the price. From Simmons' point of view, the invasion of Iraq is associated with the start of long-term increase in oil prices, but it may mitigate the decline in oil production by retaining a partial amount of Iraq's oil reserves. As a direct consequence, the oil production capacity was diminished to two million barrels per day.[16]

Rising costs of oil

July 2006, San Francisco, California

After retreating for several months in late 2004 and early 2005, crude oil prices rose to new highs in March 2005. The price on NYMEX has been above the $50 per barrel since March 5, 2005. In June 2005, crude oil prices broke the psychological barrier of $60 per barrier. After the destruction of Hurricane Katrina in the United States, gasoline prices reached a record high during the first week of September 2005. The average retail price was, on average, $3.04 per U.S. gallon.[17] The average retail price of a liter of petrol in the United Kingdom was 86.4p on October 19, 2006, or $6.13 per gallon.[18] Oil production in Iraq continued to decline as result of the nation's ongoing conflict causing a decrease in production to 1 million barrels per day (160,000 m3/d).[19]

In mid 2006, crude oil was traded for over USD 79 per barrel (bbl),[20] setting an all-time record. The run-up is attributed to a 1.9 increase in gasoline consumption, geopolitical tensions resulting from North Korea's missile launch. The ongoing Iraq war, as well as Israel and Lebanon going to war are also causative factors. The higher price of oil substantially cut growth of world oil demand in 2006, including a reduction in oil demand of the OECD.[21] After news of North Korea's successful nuclear test on October 9, 2006, oil prices rose past $60 a barrel, but fell back the next day.

On October 19, 2007, U.S. light crude rose to $90.02 per barrel due to a combination of ongoing tensions in eastern Turkey and the reducing strength of the U.S. dollar.[22] Prices fell briefly on the expectation of increased U.S. crude oil stocks, however they quickly rose to a peak of $92.22 on October 26, 2007.[23]

On January 2, 2008, U.S. light crude surpassed $100 per barrel before falling to $99.69 due to tensions on New Years Day in Nigeria, and on suspicion that U.S. crude stocks will have dropped for the seventh consecutive week. A BBC report from the following day stated a single trader bid up the price; Stephen Schork, a former floor trader on the New York Mercantile Exchange and the editor of an oil market newsletter, said one floor trader bought 1,000 barrels (160 m3), the smallest amount permitted, and immediately sold it for $99.40 at a $600 loss.[24] Oil fell back later in the week to $97.91 at the close of trading on Friday, January 4, in part due to a weak jobs report that showed unemployment had risen.[25]

On March 5, 2008, OPEC accused the United States of economic "mismanagement" that was pushing oil prices to record highs, rebuffing calls to boost output and laying blame at the George W. Bush administration.[26] Oil prices surged above $110 to a new inflation-adjusted record on March 12, 2008 before settling at $109.92.[27] On April 18, 2008 the price of oil broke $117 per barrel after a Nigerian militant group claimed an attack on an oil pipeline.[28] Oil prices rose to a new high of $119.90 a barrel on April 22, 2008,[29] before dipping and then rising $3 on April 25, 2008 to $119.10 on the New York Mercantile Exchange after a news report that a ship contracted by the U.S. Military Sealift Command fired at an Iranian boat.[30]

On June 6, prices rose $11 in 24 hours, the largest gain in history due to the possibility of an Israeli attack on Iran.[31] The combination of two major oil suppliers reducing supply generated fears of a repeat of the 1973 oil crisis. The mid-July decision of Saudi Arabia to increase oil output caused little significant influence on prices. According to the oil minister of the Islamic Republic of Iran, Gholam-Hossein Nozari, the world markets were saturated[32] and a Saudi promise of increased production would not lower prices.[33] Several Asian refineries were refusing Saudi petroleum in late June because they were over priced grade.[34]

On July 3, "the Brent North Sea crude contract for August delivery rose to $US145.01 a barrel" in Asian trade.[35] London Brent crude reached a record of $145.75 a barrel, and Brent crude for August delivery peaked to a record $145.11 a barrel on London's ICE Futures Europe exchange, and to $144.44 a barrel on the NYMExchange.[36][37] By midday in Europe, crude rose to $145.85 a barrel on the NYME while Brent crude futures rose to a trading record of $146.69 a barrel on the ICE Futures exchange.[38][39]

Falling prices

March 2009, Dunellen, New Jersey

On July 15, 2008, a sell-off began after remarks by Chairman of the Federal Reserve, Ben Bernanke, indicated significant demand destruction within the US because of high prices. Bernanke's statement precipitated an $8 drop, the biggest since the first US-Iraq war.[40][41] By the end of the week, crude oil fell 11% to $128, also affected by easing of tensions between the US and Iran.[42] By August 13, prices had fallen to $113 a barrel.[43] By the middle of September, oil price fell below $100 for the first time in over six months,[44] falling below $92 in the aftermath of the Lehman Brothers bankruptcy.[45]

A stronger US dollar and a likely decline in European demand were suggested to be among the causes of the decline.[46] By October 24, the price of crude dropped to $64.15,[47] and closed at $60.77 on November 6.[10]

2009

In January 2009, oil prices rose temporarily because of tensions in the Gaza Strip.[48] From mid January to February 13, oil fell to near $35 a barrel.[49]

2010

Around May 2010, crude oil prices started to rise again, reaching $69.41 per barrel on May 17, 2010.[50] Prices rose back to $90/barrel in December 2010.[51] The national average for a gallon of 87 octane regular unleaded averaged $3.00/gallon on December 23, sparking fear of a second recession if prices reached $100/barrel and $4.00/gallon gasoline, as forecasted for spring 2011.[citation needed] The price increases in December were based on global demand and the Arctic blasts affecting North America and Europe.

2011

Political turmoil in Egypt, Libya, Yemen, and Bahrain drove oil prices to $95/barrel in late February 2011. A few days prior, oil prices on the NYMEX closed at $86. Oil prices topped at $103 on February 24 where oil production is curtailed to the political upheaval in Libya.[52] The weakened U.S. Dollar has resulted in a spike to $112/barrel with the national average of $3.74/gallon - with expectations of damaging the U.S. economy suggestive of a long-term recession.[53] As of April 26, the national average is $3.87 - with a fear of $4/gallon as the nationwide average prior to the summer driving season .[54]

References

  1. ^ "Oil reaches new record above $99". BBC. November 21, 2007. Retrieved 2007-11-29.
  2. ^ "Oil prices pushed to fresh high". BBC News. 2008-02-29. Retrieved 2009-12-31.
  3. ^ David Goldman (March 12, 2008). "Oil crosses record $110, despite supply rise". CNN Money. Retrieved 2008-03-12.
  4. ^ John Wilen (March 10, 3:50 pm). "Gas Prices Near Records, Following Oil". Associated Press. Archived from the original on 2008-03-13. Retrieved 2008-03-10. {{cite news}}: Check date values in: |date= (help)
  5. ^ "Oil sets fresh record above $109". BBC News. March 11, 2008. Retrieved 2008-03-11.
  6. ^ "Oil Is Little Changed After Falling as Investors Sell Contracts". Bloomberg.com.
  7. ^ "Oil Rises to Record Above $141 as Investors Buy Commodities". Bloomberg.com.
  8. ^ "Oil hits new high on Iran fears". BBC.com. 2008-07-11. Retrieved 2009-12-31.
  9. ^ Oil spikes $25 a barrel on anxiety over US bailout
  10. ^ a b Rooney, Ben (November 7, 2008). "Oil holds slim gains". CNN. Retrieved April 21, 2010.
  11. ^ Global 500, Fortune website, accessed August 2008.
  12. ^ Oil prices in 2003 averaged highest in 20 years, USA Today
  13. ^ Iraq: Oil and Economy
  14. ^ Collier, Robert (2005-03-20). "Iraq invasion may be remembered as the start of the age of oil scarcity". San Francisco Chronicle. Retrieved 2008-03-20.
  15. ^ a b Simmons, Matthew (2007-11-16). "Another Nail in the Coffin of the Case Against Peak Oil" (PDF). Archived from the original (PDF) on 2008-04-11. Retrieved 2008-04-05. {{cite web}}: Check |authorlink= value (help); Cite has empty unknown parameters: |month= and |coauthors= (help); More than one of |author= and |last= specified (help)
  16. ^ Youssef M. Ibrahim (2004-05-10). "The world has lost Iraq's oil". USA Today. Retrieved 2008-03-20.
  17. ^ "Weekly U.S. Retail Gasoline Prices, Regular Grade". Retrieved 2006-09-26.
  18. ^ "Free UK Petrol Prices". Retrieved 2007-11-29.
  19. ^ Krane, Jim (2006-04-28). "Iraq Oil Output Lowest Since Invasion". Washington Post. Retrieved 2008-03-20.
  20. ^ "My Stocks & Funds". CNN. Retrieved April 21, 2010.
  21. ^ Oil demand falls in developed world for first time in 20 years
  22. ^ Oil prices touch above $90 level, BBC News
  23. ^ Supply fears push oil above $92
  24. ^ Single trader behind oil record - http://news.bbc.co.uk/1/hi/business/7169543.stm
  25. ^ Shenk, Mark (January 4, 2008). "Oil Falls More Than $1 as U.S. Jobs Data Signal Lower Fuel Use". Bloomberg L.P.
  26. ^ "OPEC accuses U.S. on oil prices". CNN. March 5, 2008. [dead link]
  27. ^ "Oil Rises Above $110 to Record as the Dollar Falls Against Euro". Bloomberg. March 12, 2008.
  28. ^ BBC News: Oil prices continue upward march
  29. ^ "Oil nears $120". CNN Money. April 22, 2008. Retrieved 2008-04-22.
  30. ^ Oil jumps over $3 after report on U.S. shot toward Iran boat
  31. ^ Oil Prices Take a Nerve-Rattling Jump Past $138, New York Times, June 7, 2008
  32. ^ Iran: World oil market saturated
  33. ^ Oil output increase will not affect price
  34. ^ Asia says no to extra Saudi crude
  35. ^ Oil prices hit new peak above US$145
  36. ^ bloomberg.com, Crude Oil Rises to Record Above $144 After U.S. Stockpile Drop
  37. ^ uk.reuters.com, Oil hits new peak
  38. ^ ap.google.com, Oil prices near $146
  39. ^ washingtontimes.com, Oil prices near $146
  40. ^ CNN, Biggest oil price drop in 17 years
  41. ^ CNN, Oil's two-day decline: more than $10 a barrel
  42. ^ The Age, Oil sags to 6-week low as war worries ebb
  43. ^ [1]
  44. ^ http://www.marketwatch.com/news/story/oil-futures-tumble-5-trade/story.aspx?guid={4EADE8D4-45B2-4C67-829F-5A6C71B52F17}
  45. ^ Crude Oil Drops Below $92 as Lehman Adds to Demand Concern
  46. ^ Rooney, Ben (October 6, 2008). "Oil tumbles to 8-month low below $88". CNN. Retrieved April 21, 2010.
  47. ^ http://www.theaustralian.news.com.au/business/story/0,28124,24549827-36418,00.html. {{cite news}}: Missing or empty |title= (help) [dead link]
  48. ^ "Oil price rises on Gaza conflict". BBC. November 5, 2009. Retrieved 2011-03-12.
  49. ^ "Oil languishes near $35 on weak US economy". Associated Press. January 16, 2009. Retrieved 2011-03-12.
  50. ^ CME.com
  51. ^ Riley, Charles (December 23, 2010). "Gas prices top $3 a gallon". CNN. Retrieved December 23, 2010.
  52. ^ Rooney, Ben (February 24, 2011). "Oil prices spike to $103, then drop back". CNN. Retrieved February 24, 2011.
  53. ^ "Oil settles above $112 as dollar falls". Yahoo!. Retrieved April 8, 2011.
  54. ^ "Gasoline rises to $3.87 per gallon". Yahoo!. Retrieved April 26, 2011.

External links

Retrieved from "https://en.wikipedia.org/w/index.php?title=World_oil_market_chronology_from_2003&oldid=429042478"