Slide 4 of 18
Notes:
- World oil prices have tripled from their low point in December 1998 to August this year, pulling product prices up as well. But crude prices are expected to show a gradual decline as increased oil production from OPEC and others enters the world oil market. We won’t likely see much decline this year, however, as prices are expected to end the year at about $30 per barrel.
- The average price of WTI was almost $30 per barrel in March, but dropped to $26 in April as the market responded to the additional OPEC production.
- However, prices strengthened again, averaging almost $32 in June, $30 in July, and $31 in August.
- The continued increases in crude oil prices indicate buyers are having trouble finding crude oil, bidding higher prices to obtain the barrels available.
- These crude oil price projections reflect:
- Fairly low world demand growth during 2000 of 1.3 percent, or 1.0 million barrels per day.
- Non OPEC production growth during 2000 of almost 1.1 million barrels per day.
- Growth in Iraqi production of 700 thousand barrels per day from Q1 to Q4 2000. Iraqi production is estimated at more than 3.0 million barrels per day in the fourth quarter 2000.
- Growing OPEC leakage over the current OPEC target.
- Slow projected inventory build of 0.6 million barrels per day in 2000 and 0.4 million barrels per day in 2001.
