Slide 2 of 19
Notes:
World oil prices have nearly 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 expect to see some decline over the next two months 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 $30-$32 in July through August. In September, prices increased again to nearly $34, but then decreased to $33 in October.
These crude oil price projections reflect:
Fairly low world demand growth during 2000 of 1.5 percent, or 1.1 million barrels per day.
Non-OPEC production growth during 2000 of almost 1.2 million barrels per day.
Growth in Iraqi crude oil production of 600 thousand barrels per day from Q1 to Q4 2000. Iraqi crude oil production is estimated at about 3.0 million barrels per day in the fourth quarter of 2000.
Growing OPEC 10 crude oil production throughout 2000.
Slow projected inventory build of nearly 1.0 million barrels per day in 2000 and 0.7 million barrels per day in 2001.
