About Oil Prices

moira77 asked:


Stupid me, I thought that the reason gas prices were going to climb to $4 this summer was because the price of oil was skyrocketing. Well now oil prices have fallen and yet gas is still rising. What’s the deal? Obviously my Economics 101 class was not enough to enable me to understand all this lol.

Helen

Frank F asked:


When we see this price go down, how soon until we can expect to see the price at the pump go down? Also, these price reports usually include “for (month) delivery”. Does that mean delivery to consumers, or delivery to the refineries? How does this delivery month affect prices at the pump?

I understand that outside influences can change the price at the pump (refinery capacity, strikes, tax changes, etc). But, if we strip these variables away, how much does the price of crude oil (per barrel) affect the price at the pump?

Beth

Muna wa Wanjiru asked:


Crude oil is a substance that is needed for all of the industrial and residential purposes. To make sure that there is enough crude oil for our needs we must pay a certain amount of money to the countries that we import the oil from. These companies have a set crude oil price.

The crude oil price is based on the barrel production amount. The lower the oil production, the higher the price will be. This is due to the fact that these companies can only drill a certain amount of oil from their drilling fields. The process to transport the crude oil to the various supply houses is also difficult as the company must make sure that no accidents occur.

As oil is a valuable commodity the oil production company will make sure that they have the amount that is quoted for the refining companies and for the import procedures. Once the crude oil price has been paid it is necessary to transport the crude oil home. This is one more reason why the crude oil price is very high in some seasons and low in others.

The various governments look for different ways of finding new sources of crude oil. The closer to home these sources are the more success the governments will have with making the crude oil price low. This in turn would be passed onto the people and they would not feel the massive blow to their finances.

Some companies have started looking for large ocean deposits of oil which are located close to their home countries. This proximity allows the crude oil to be harvested and sent to the refining plant. As the drilling rig and the processing plant are found close to each other, there is less need for the worry about environmental damage occurring. The proximity of the oil drilling rig means the costs of importing large amounts of oil can be reduced.

This in turn will allow these home oil producing companies to see about lowering the crude oil price which they have fixed for domestic and imported oil prices. The lowering of the oil prices will not mean that quality or oil extraction and processing amounts will be reduced.

It means instead that as the drilling rig of the oil is closer to home the large amounts of money the government needs to pay to foreign governments will be reduced. The benefits of this reduction will be felt by the consumer as they can afford to use fuel oil to heat their homes in winter minus the high prices of the previous winter heating bills.

Cory

Lauren Woods asked:



Oil prices increased above $64 a barrel after a rush in the preceding session. This is due to the fact that traders have reacted to warnings that OPEC production was at its lowest point in two years.

Iraq and Algeria as well as the (Organization of Petroleum Exporting Countries) OPEC member nations also added to the upward pressure. As consumers predicted, the chaos has resulted to the squeezing of gasoline supplies as the summer driving season approaches. In Europe, light, sweet crude for May delivery increased 31 cents to $64.16 a barrel in electronic trading on the New York Mercantile Exchange by the afternoon.

The contract increased almost $2 Thursday to close at $63.85 a barrel. This happened after the International Energy Agency (IEA) warned that output by the OPEC had dived to its lowest level in more than two years on production outages and self-imposed cuts.

According to the Platts survey of OPEC production last month, the average 26.54 million barrels pumped a day by OPEC members still represented overproduction of 740,000 barrels a day above the group’s production target. In London, the Brent crude contract for May delivery increased 62 cents to $69.34 a barrel on the ICE Futures exchange.

Oil prices were also supported after the U.S. government reported dwindling domestic gasoline stockpiles in the face of unflagging demand. A further rise in gasoline demand was necessary to boost crude towards $70 a barrel as Ken Hasegawa of Tokyo brokerage Himawari CX told Dow Jones Newswires.

The U.S. Energy Information Administration reported Wednesday that the sum of American gasoline stockpiles declined by 5.5 million barrels last week to 199.7 million barrels. Analysts had expected a 1.3 million barrel decrease as according to a survey by Dow Jones Newswires. “Several refinery glitches in the U.S…. further raised worries concerning gasoline supply ahead of the summer driving reason,” noted Vienna’s PVM Oil Associates.

Another factor linked to the decline is geopolitics. After oil and gas-rich Algeria was injured by bomb attacks Thursday, worries about the oil producer’s control over an Islamic insurgency that peaked in the 1990s heightened even more.

A car bomb blasted the walls off the Algerian prime minister’s office in Algiers which, along with two other coordinated attacks at a suburban police station, killed 33 people. Separately, a suicide bomb attack hit the Iraqi parliament building in Baghdad just last Thursday. The attack occurred inside the Green Zone, the most heavily guarded area in the country. “What is there about this environment that could possibly produce a conclusion that prices are coming down?” said Fimat USA analyst John Kilduff.

In the past couple of weeks, oil prices have been volatile increasing about $5 a barrel after Iran detained 15 British sailors and marines. Enthusiasts seemed to have successfully sought the aid of active brakes direct to stop the phenomenal increase. Prices dropped on the release of the detainees last Thursday. Additionally, the prices slid almost $3 Monday on expectations of oversupply at a key North American delivery point before gradually improving. But fluctuations continue nonetheless…

Warren

Muna wa Wanjiru asked:


As most people can attest the winter seasons are the worst as the cold weather makes us desire to get warm as quickly as possible. There is a downside to the need to be warm. This downside is comprised by the various heating oil prices that need to be paid. The price which must be paid will depend on the amount of heat that is used by your home and family in these months.

While many times these heating oil prices are very hard to bear there are compensations to be found. This compensation can be found in the fact that once the supply amount has reduced itself to an acceptable limit, the prices for oil will itself become stable and less expensive.

Also as the oil producing countries and OPEC work together they will see how they can set the oil prices to a reasonable rate. This however is not something that will occur very quickly in the winter as the countries that import these fuel oils need to have more oil imported into their countries. Due to this fact the production rates of oil are less than the demand for the oil.

These fluctuating conditions are the reason why the heating oil prices can rise during the winter season and fall in the summer months. For the consumer this situation translates itself into huge heating bills for the winter months and a reduction of the oil amounts they will need.

While on the surface there does not seem to be anything to control these huge bills the reality can be altered. The first step is to repair any broken glass preferably with double glazed windows. These windows are designed to retain the heat in a house during the cold months. Next you can see about installing a thicker insulation level.

The insulation will help in trapping the rising heat in the house. You can also see about using a less amount of heating oil in the daylight hours. For the night hours you can augment the heat from your heating oil supply with an alternative source of heat. This new source can be a wood burning fire. The burning wood logs should develop enough of heat to compensate for the lower heating oil use.

These various measures are ones you can use to try and stave off the high heating oil prices which seem to develop every winter. By thinking of these different methods you can control the amount of money you will have to pay for keeping your home nice and cozy in the cold winter months.

Catherine

Hayiboman asked:


LONDON. British Prime Minister Gordon Brown has been forced to threaten Iran, as the falling oil price continues to jeopardise the retirement savings of up to dozens of energy company CEOs and secret political backers. Insiders say Brown was left little choice but to try to spike the oil price by warning Iran to suspend its programme of building imaginary nuclear weapons.Defence analysts agree that Iran has managed to build between 8,000 and 15,000 long-range imaginary nuclear missiles, capable of destroying Israel, the Unites States, the moon, and most of space. There is less certainty about Iran’s non-imaginary nuclear capabilities.However this morning Brown said that the West could not afford to hesitate in preventing a “potential human tragedy”.”Unless we act, and launch some sort of attack against the world’s second biggest producer of oil, the golden years of some of the wealthiest people in Britain and the United States could be plunged into a nightmare existence of three-bedroom houses, public transport, and only one international holiday per year,” said Brown.He said that as a Briton, a human being, and a shareholder in BP, he would not allow this “horror scenario” to unfold.”There is an ancient Hebrew proverb that was told to me by the Commander-in-Chief of the Israeli Air Force: ‘Save the retirement annuities of a shadowy billionaire, and you save the world.’”We owe it to our grandchildren, and to the people who have already spent our grandchildren’s pensions, to keep the oil price high.”Meanwhile Tehran has responded to Brown’s hawkish statements by reiterating its promise to “bury” Israel.Speaking from the Scimitar of Devine Vengeance Lifestyle Centre in Tehran, Iran’s Deputy Minister of Death to Zionism said that his country was ready to “rain rubble down on the Zionist rapists and their homosexual British lapdogs”.It is unclear how Iran intends to do this, as its ballistic missile arsenal consists of five septic tanks propelled by a mixture of rotting salamis and fermenting beer.However defence analysts believe that Iran is trying to acquire a dozen steam-powered ballistic catapults from France, which might be able to launch small rocks at Israel.”They probably can’t bury Israel,” said Downing Street military attaché Brigadier Lesley Agincourt-Brittle. “But thy could definitely lay down a few inches of gravel in the south of the country, given a favourable wind.”
Read more at: www.hayibo.com

Jamie

Dylan Sun asked:


World crude oil futures prices set a new record close Tuesday on supply concern despite the world’s major oil producers decided to raise their daily output. Light, sweet crude oil for October delivery rose 74 cents to 78.23 a barrel on the New York Mercantile Exchange. The former highest-ever settlement price for a front-month contract was 78.21 dollars a barrel, set on July 31.

OPEC, which produces about 40 percent of the world’s oil, agreed late Tuesday in Vienna to boost its crude oil output by 500,000barrels a day, which would take effect on Nov. 1. OPEC officials said the agreement would add oil to current production levels over their current 25.8 million barrels per day quota ceiling.

However, the cartel’s move could not ease investors’ worries that the current oil production would not be enough to boost thinning world inventories. “The fact that OPEC indicated that it would boost oil production by additional 500,000 barrels makes great headlines, but is unlikely to achieve the stated result of meeting demand,” Wall Street Strategies’ senior research analyst Conley Turner told Xinhua. “Even though the cartel is saying that this production increase that will commence in November, the reality on the ground is that production is already at full throttle,” Turner pointed out. “In fact, many members are already producing beyond their quota so an extra half a million barrels is really not going to have a meaningful impact on satisfying demand especially as winter approaches,” he added.

The demand for oil is increasing. Oil is playing more and more important part. Oil prices have been risen 27 percent this year and have tripled since 2002 as investors buy into growing consumer demand, real or potential supply disruptions in producers such as Nigeria and Iran and infrastructure constraints such as a lack of refining capacity.

The U.S. Energy Information Administration, the Energy Department’s reporting arm, warned Tuesday in a monthly report that tight global energy supplies are expected to keep energy prices high through 2008. According to the U.S. Energy Department, global petroleum consumption will probably increase 1.27 million barrels to 85.7 million barrels a day this year while demand will rise by 1.51 million barrels, or 1.8 percent, to 87.2 million barrels a day in 2008.

World oil production is expected to average 84.64 million barrels a day this year, up 14,000 barrels a day from 2006, according to the department. Output is forecast to rise by 2.42 million barrels to 87.1 million barrels in 2008.

Bryan

Sim TY asked:


Oil price is coming down drastically. I like to run some research to understand to what level oil price should bottom out. Can anyone share any hint?

Sue