Oil Prices Averaged Highest in 20 Years

NEW YORK (Reuters) - Instability in oil producing nations like Iraq, Venezuela and Nigeria helped boost U.S. crude oil prices to an average of $31 a barrel in 2003, the highest yearly average in more than 20 years, energy experts said on Wednesday.
The strong prices have been a headache to consumers who shelled out big bucks for gasoline, heating oil and other fuels, and have been blamed for slowing the recovery in the U.S. economy.

"It has been a very strong year for oil prices," said Jim Ritterbusch, president of Ritterbusch and Associates.

"This year has been marked by instability, and instability is always coupled with high prices," said another senior energy analyst based in Washington. "I expect prices will remain on the strong side into next year."

More: http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=4061937

But they never realy came out and said it was about oil now did they. They will spin this as being right about not being wrong about that....I need a cigarette.

I think all the flowers clogged up the pipelines.

supply line and not interfering with corporate profits. By manufacturing a crisis in Iraq ("It may be a year before we reach pre-war production levels")the BushCo profits keep flowing, and they guarantee that none of the oil cartel will get out of control with our military a few minutes by air away. BushCo has no need to steal oil, their buddies in the industry all are involved in the production and extraction, so they all benefit by any world pricing spike. And BushCo is letting natural gas prices skyrocket without interference. Coal will be next because we "can't keep up with demand" mark my words. You think electricity is expensive now, wait till this summer.

We didn't see the forest for the trees.

Oil prices were on the way up almost immediately after Bush took office, long before 9/11. Just a matter of time before a shootin' war put prices on the roof.

make up a buck. Oh wait, isn't that called inflation? But they tell us we don't have any inflation - oh, ya I forgot they don't include the thing people actually NEED to survive in that basket of good, ie a roof over your head and some heat during those cold winter nights.

Silly me! :evilgrin:

OPEC already blamed one production limiting round on the falling worth of the dollar. What is interesting, is that while oil has been getting more expensive in dollars, it's been getting cheaper by the barrel compared to the worth of the euro.

If I'm figuring this correctly, when the euro was $0.80 and oil was $25/barrel, the price in euros was 31.25/barrel. Now that the euro is at $1.26 and oil is at $31/barrel, the price in euros is only about 24.5 euros/barrel. I wonder if the energy cost savings will make up for any economic loss due to fewer exports to the US due to the cheaper dollar? (although European imports to the US don't show any signs of slowing yet that I've heard)

As the dollar falls further, OPEC will either have to keep raising the dollar price, or switch to selling in euros just to stay even (real income-wise).

(sorry Mods…I can’t link to it, so I posted more than I may have should)

In essence…consumption and a weak dollar = WTI closing the year out at $32.51 per bbl…..with a little help from OPEC decision-making and an Iraqi quagmire.



NEW YORK (Dow Jones)--Despite record high crude oil prices for 2003, U.S. oil
demand topped 20 million barrels a day for the first time ever in the year,
rising by 1.3%, the most since 1999.
Early data released Wednesday by the Energy Information Administration show
consumption of gasoline and distillate fuel, comprising home-heating oil and
diesel fuel, was the highest for any year.
Imports of crude oil set a volume record of 9.6 million b/d, up 5.2% from a
year ago. Refiners processed more crude each day in 2003 than ever before,
running at a rate of 15.286 million b/d, up 2.3% from a year earlier.
The EIA data measuring U.S. oil use through Dec. 26, also show company-held
crude oil stocks ended the year at 270.7 million barrels, down 27.4 million
barrels from the five-year average level. A review of EIA data show the figure
would be the lowest end-year crude stocks since 1975.
Total company-held inventories of crude and petroleum products ended the year
at 929.1 million barrels, down 19.9 million barrels from a year ago, and 60.2
million barrels below the five-year average.
A review of EIA data show commercial stocks fell by 478,260 b/d during the
fourth-quarter, the most biggest drop in fourth-quarter stocks since 1999.
The melange of data from the U.S., which as the world's biggest oil consumer
accounts for 25% of global demand, will complicate OPEC's output policy making.
The Organization of Petroleum Exporting Countries has sought to rein-in oil
output to avoid a potential counter-seasonal global stockbuild in the
fourth-quarter, which it fears would push down prices in the post-winter demand
period.
The sizable drop in U.S. inventories in the fourth-quarter may suggest that
those fears are unfounded.
The U.S. and the International Energy Agency have criticized OPEC for
overtightening inventories by keeping output too low, and thereby inflating
prices, which could hinder the world economy.
But OPEC could argue, as it has, that with the U.S. oil demand surging even
with prices at record levels, oil prices really aren't too high.
Nymex crude oil futures prices so far this year have averaged $31.04, up 19%
from a year ago, and the highest annual average in the 20 years the contract has
been trading.
OPEC is expected to informally discuss next week whether it should loosen
output restraints as the price of its oil reference basket remains above the $28
top end of its $22-$28 for 20 straight trading days.
The group's price-band guidelines suggest OPEC could consider increasing its
output ceiling by 500,000 b/d. But several OPEC ministers, fearing a sharp drop
in demand in the second quarter, and a potential price crash, have argued that
OPEC shouldn't add more oil to the market now. They argue that high prices are
due to speculation and politics, not fundamentals, and say OPEC should delay any
consideration of output changes until its Feb. 10 meeting in Algeria.
The weaker level of the U.S. dollar is also said to justify OPEC's hands-off
policy, with current $28 oil prices for the basket providing the same buying
power as a $25 price of a few years ago.

The petrologists say that we've reached the point where it will become steadily more costly to produce the oil. We've used almost all of the easily-recovered oil, which is about one-third the amount the Earth has.

We're not "running out". It's just that the stuff we have is deeper and much more viscous. We've also found every major oil field the Earth has (of course, there's still plenty of minor oil fields). So from here on in, the price of oil climbs.

In about a decade, it will probably get very expensive. So avoid the rush -- prepare now.

But we won't. Isn't that always the way it goes?

--bkl
Gloom. Doom. She's sleeping with WHOM?

That is to say we're running out fast. There's still some to be had but it's gonna be a bitch to get at it. Not to mention the desperation for the black gold might cause some environmental protections to be scuttled. Also with places like China and India industrializing, the competition for this increasingly scarce resource is likely to become brutal. As in "world war" brutal. Wasn't a hunger for easily-accessible petroleum part of what drove Japan's actions in WWII as well as Hitler's drive into Russia (oil fields in the Caucasus?) And as if oil scarcity isn't enough to worry about, isn't there also the possibility of water shortages in parts of the world as well?

There are some strange things happening with the oil industry, and people who are in a position to know what's going on aren't telling us.

1) You're right: oil consumption is steadily increasing every year. We have a country full of gas-guzzlers, and no one seems concerned that there's actually a limited supply.

2) There is no concerted effort to cut back on our oil consumption. On the contrary, it seems as if politicians like the idea that we're burning up more fossil fuel than every. Remember back about 20 years ago, when Nixon and Carter asked people to conserve? Not any more.

3) Politicians and other knowledgeable people aren't saying anything. If we truly are running out of oil, why aren't they educating people to that devastating scenario? Why would they encourage people to use more?

4) Did the US invade Iraq to sit on top of the oil? Maybe they're not so eager to start pumping, but instead want to hold it as a reserve, when other countries start running out and become desperate.

5) What about China? I've read that they are Threat #1 to the US. They have a huge population, and their demand for oil could surpass 1 billion barrels of oil per day. I can see wars being started over this.