How Did We Get To This Point?

• 1996

  • Oil Prices in the Low to Mid-$20s and Low Inventories

• 1997-1998

  • Historically Low Oil Prices Caused by:
    • Increased Production from Iraq
    • Asian Economic Crisis
    • Warmer-than-normal Winters
    • Increased Oil Supply from non-Iraqi Sources

• 1999-2000

  • OPEC Production Cuts Lead to Low Inventories
  • Oil Prices Reach $30 Level

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Following the recovery after the Gulf War, prices hit $20+ in 1996 and the talk was of “Just-In-Time” inventories.

Then came the price collapse in 1998 based on events that took place in 1997/98.

1999 became the year of oil price recovery as the 3rd cut in OPEC production quotas made prices reach $30+.