Pak Rovicky,
Just one comment :
The refinery bottlenecks (whether they exist or not) should have no impact
on the price of crude oil. The extent of refinery bottlenecks should show up in
refinery margins
(high margins if lack of capacity) which are measured as the difference
between the product prices and the crude price minus the cost of refining,
and not in the crude price. In a true market with perfect information the
price is only a factor of supply and demand or in our case supply of crude
oil and demand for refined products translated back to demand for crude to
feed refineries. As the oil market is far from perfect many other factors
play a large role. However, if you look back at the two previous oil
shocks (1973 and 1979-1080) as well as the counter shock in 1985 then
clearly large increases in price happen when there is very little spare
capacity and decreases happen when there is an excess of capacity. At
present the margin of capacity is extremely small given the large growth
in demand in the past few years (due to world economic growth (forecast at
nearly 5% this year !!!!) as much as Chinese demand) and the increasing
difficulty we all face to combat decline with "new" reserves. What
happened in previous shocks to help us was a combination of whole new oil
provinces brought onstream (e.g. North sea), new energies substituting for
oil (gas and nuclear) and world recession to dampen increases in demand.
Now the options in any of these areas are much more limited !!!
The clear message here is "there is no time like the present to be finding
new hydrocarbon deposits"
Regards,
D. Rusdianto
Rovicky Dwi Putrohari <[EMAIL PROTECTED]>
08/10/2004 07:44 AM
Please respond to iagi-net
To: [EMAIL PROTECTED]
cc:
Subject: [iagi-net-l] Why are oil prices so high?
Hari kemaren minyak tercatat hingga 53$/bbl ...
Versi Reuter,
Ada bebrapa point kenapa harga minyak naik drastis kali ini :
- Rising demand
- Need for investment
- Lack of spare supply
- Political tensions in oil-producing nations
- Refinery bottlenecks -- "The United States accounts for about 45
percent of world gasoline consumption"
Lihat saja siapa yg paliing boros !
Aku rasa US sudah memperkirakannya, namun karena di Iraq masih
berkepanjangan, sepertinya krisis ini masih bisa menjadi
berkepanjangan juga ...
Nah sekarang lihat fact box ini :
NET OIL EXPORTERS
(millions of barrels per day, 2003)
1. Saudi Arabia 8.38
2. Russia 5.81
3. Norway 3.02
4. Iran 2.48
5. UAE 2.29
6. Venezuela 2.23
Source: U.S. Department of Energy June 2004
Ditemukannya Giant Field di Shakhalin, mungkin menjadikan Rusia
menggeliat lagi .... howgh !
RDP
=============================
Why are oil prices so high?
Tuesday, September 28, 2004 Posted: 0925 GMT (1725 HKT)
LONDON, England (Reuters) -- Following are some of the factors behind
oil's price surge.
Rising demand
World oil demand is growing at the fastest pace in 24 years. China's
economic expansion has fueled dramatic gains in fuel consumption,
drawing in crude and refined products from all around the world.
Chinese crude imports are up 40 percent so far this year and show no
sign of slowing despite government efforts to calm economic growth.
Chinese demand is forecast to keep rising next year as car ownership
surges and power generation needs grow. The prospect of sustained
growth has encouraged big-money speculative hedge funds to bet that
high oil prices are here to stay.
Indian consumption is growing fast too. And solid growth in the U.S.
economy, which devours a quarter or all world oil, is driving
competition between Asia and the United States for supplies.
Need for investment
Big oil reservoirs are becoming harder to find and more expensive to
develop. Many of the oil provinces outside OPEC are mature, which
means that finds are now smaller, need more costly technology to
develop and fall faster from peak production.
In OPEC, which holds around two-thirds of the world's oil reserves,
many of the bigger nations either do not allow foreign investment in
oil, or have unattractive investment and legal terms.
This has slowed down production capacity growth in OPEC nations,
meaning that most are already producing flat out to meet demand.
Oil companies have also been cautious on spending since the '97-'98
price crash slashed their share prices and triggered a spate of
mergers. Many now see more value in buying back their own shares than
plowing money into developing oil supplies.
They have focused on large-scale projects, which will give them good
margins. Many new ventures are in remote areas, which demand expensive
equipment and are more susceptible to delays.
Forecasts of non-OPEC supply growth, especially when the rebound in
Russian production is stripped out, have consistently been overstated.
Non-OPEC supply growth outside Russia before the price crash averaged
more than one million bpd. Since then it has been negligible.
The increased cost of finding and developing non-OPEC oil has fueled
speculators convictions that oil markets are a good long-term bet.
Lack of spare supply
The OPEC producer cartel has pushed its production to the highest
level in 25 years in an effort to keep prices under control. This has
left little spare capacity outside top world exporter Saudi Arabia.
The strain on the world supply system has left it more vulnerable to
supply disruptions and increased the likelihood of price spikes. This
has attracted further buying interest from hedge funds betting that
prices could go even higher.
At the same time, the oil industry's stock cushion against sudden
supply disruptions has eroded. Oil companies have sought to become
more efficient and free up capital by holding lower stocks. A wave of
mergers following 1998-1999's price crash also reduced the number of
companies holding inventory.
Commercial crude inventories in the United States have fallen for the
last eight weeks, in part due to disruption to oil operations from the
spate of storms in the U.S. Gulf.
The inventory drawdown has fueled concern that refiners may struggle
to build supplies of distillate fuel, including heating oil, for peak
winter demand.
OPEC, which controls around half the world's exports, has in recent
years worked hard to stop stocks building, especially in the United
States, during periods of seasonally weak demand.
Ministers have announced plans to cut production before prices start
to weaken, helping to create the conditions for a sustained price
backwardation, pricing physical oil at a premium to future supplies.
This pricing structure gives refiners no chance to replenish stocks
with lower-priced crude or products and forces them to buy at the last
minute.
Political tensions in oil-producing nations
Political tensions in the Middle East and violence in Iraq have
undermined traders' confidence in security of supply from the region,
which pumps a third of the world's oil.
Iraqi exports have been repeatedly hit by sabotage attacks, keeping
its supplies below pre-war volumes.
Traders fear Islamic militants could target oil infrastructure in
OPEC's biggest producer Saudi Arabia. May's deadly attacks on foreign
oil workers in the Saudi oil city of Khobar fostered fears of a larger
attack on the kingdom's tightly-protected oil facilities.
Russian oil giant Yukos, which produces around 20 percent has
repeatedly warned that it could be forced to cut production as the
government pursues payment of multibillion dollar tax arrears. It has
already trimmed exports to China.
Civil unrest in OPEC member Nigeria is another flashpoint. Rebels in
the country's oil-rich Niger delta have threatened to attack oil
facilities unless the military halts an offensive. Oil production in
Venezuela, a big supplier to the United States, is still suffering the
fall-out of the strike 18 months ago that cut capacity.
And concern is emerging over tensions between the United Nations and
Iran over nuclear inspections. High oil prices could strengthen Iran's
bargaining position if the issue comes to a head in coming months.
Supply security concerns have spurred many countries to increase
strategic inventories, withdrawing supply from an already tight
market.
The United States continues to fill its strategic petroleum reserve
despite high prices. Other countries including India, South Korea,
Taiwan and China are building reserves or plan to start soon.
The post-September 11 chill in relations between Saudi Arabia and the
United States has raised concerns that Riyadh may no longer be willing
to act as a guarantor of cheap oil as it did during the 1990s.
Refinery bottlenecks
Environmental regulations are pushing up the price of making fuel,
forcing companies to build expensive new facilities and making it
harder to ship supplies between regions.
U.S. gasoline demand is up in part because of the growing numbers of
low-mileage-per-gallon sports utility vehicles on America's highways.
The United States accounts for about 45 percent of world gasoline
consumption.
U.S. gasoline demand drives a growing requirement for high-quality
light, low-sulphur crude. China is competing for those grades of oil
to meet demand for transportation fuels, lifting the price premium for
low sulfur crude. Most of OPEC's crude is heavy and high-sulphur.
In the United States, individual states demand an array of different
gasoline blends. This makes it harder to transport supplies between
states and to import supplies from abroad.
Environmental regulations have made it more expensive to build new
refineries, and much harder to get the necessary permits.
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