Slide 4 of 30
Notes:
- The pullback in OPEC production in 1998 and 1999 in the face of increasing demand tightened the world petroleum balance and caused prices to rise.
- OPEC began increasing production again in 2000. World oil production increased by 3.5 million barrels per day from fourth quarter 1999 to fourth quarter 2000 to reach 77.9 million barrels per day, but demand also increased and the balance stayed tight. Thus prices continued to rise.
- EIA assumes in its base case OPEC production was reduced beginning in February 2001 by 1 million barrels per day from the estimate for December 2000. This results in OPEC 10 production averaging about 0.6 million barrels per day less in the 1st quarter of 2001 than was produced in the 4th quarter of 2000.
- After being sharply curtailed in December and January, EIA’s base case assumes that Iraqi oil exports return closer to more normal levels in February. By the second half of 2001, EIA assumes Iraqi crude oil production reaches 3 million barrels per day, roughly the peak levels reached last year.
- EIA also assumes that after increasing by about 0.8 million barrels per day in 2000, non-OPEC crude oil production increases by about 0.7 million barrels per day in 2001.
