Reporte De Petroleo = Crude Oil Report

CRUDE OIL MARKET REVIEW AND
FUTURE PERSPECTIVE.

LONDON, 04 FEBRUARY 2011
DONE BY: RAMON GUTIERREZ

INDEX
INTRODUCTION………………………………………………………………Pag. 3
SUPPLY…………………………………………………………………………Pag. 5
DEMAND………………………………………………………………………..Pag. 9
CHINA CASE………………………………………………………………… Pag. 12
PRICE………………………………………………………………………..... Pag. 14
CONCLUSIONS……………………………………………………………… Pag. 20BIBLIOGRAPHY………………………………………………………...……Pag. 24

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INTRODUCTION
Oil is the world economy’s most important source of energy and is, therefore, critical
to economic growth. Its value is driven by demand for petroleum products,
particularly in the transportation sector along with speculators in the derivates
markets. Petroleum products power virtually all motor vehicles, aircraft, marine
vessels, and trains around the globe.In total, products derived from oil, such as motor
gasoline, jet fuel, diesel fuel, and heating oil, supply nearly 40 percent of the energy
consumed by households, businesses, and manufacturers worldwide. Natural gas and
coal, by comparison, each supply less than 25 percent of the world’s energy needs.
The principal activities, involved in moving crude oil from its source to the ultimateconsumer are:
- Production, which involves finding, extracting, and transporting crude oil;
- Refining, the process by which crude oil is turned into products such as gasoline;
and
- Distribution and marketing, which focus on moving those products to final
consumers.
These activities occur within a global marketplace and extensive physical
infrastructure that connects buyers and sellersworldwide, all supported by an
international financial market. The physical infrastructure goes along a vast amount
of capital, including drilling rigs, pipelines, ports, tankers, barges, trucks, crude oil
storage facilities, refineries, product terminals – right down to retail storage tanks and
gasoline.
It links an international network of thousands of producers, refiners, marketers,
brokers,traders, and consumers buying and selling physical volumes of crude oil and
petroleum products throughout this chain of production. The international market
also includes futures and other financial contracts that allow buyers and sellers to
efficiently insure themselves against significant price and other business risks, at the
same time minimizing the impact of price volatility on theiroperations. In sum, the
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global oil market comprises thousands of participants who help facilitate the
movement of oil from where it is produced, to where it is refined into products, and
to where those products are ultimately sold to consumers.

Global economic recession drove energy consumption lower in 2009 the first
decline since 1982. As with the economic contraction, the decline inenergy
consumption was concentrated in the Organisation for Economic Co-operation
and Development (OECD) countries and the territory of the Former Soviet Union
(FSU). Consumption of oil declined.

Brent oil price averaged $61.67 per barrel in 2009, a decline of 37% – the
largest decline (in percentage terms) since 1986. Other benchmark crudes registered
similar declines. Prices dropped below $40and rose steadily throughout the year
2010, reaching a peak of more than $90 in mid December. Sustained OPEC
production cuts and improving economic prospects as the ye ar progressed supported
prices. Global oil consumption declined by 1.2 million barrels per day (b/d), or 1.7%,
the largest decline since 1982. OECD consumption fell by 4.8% (2 million b/d), a
fourth consecutive decline.Outside the OECD, consumption growth slowed to
860,000b/d, or 2.1%, the weakest percentage growth since 2001. China, India and
Middle Eastern countries accounted for all of the non-OECD growth. Global oil
production dropped even more rapidly than consumption, falling by 2 million b/d, or
2.6%, the largest drop, again, since 1982. OPEC production cuts implemented late in
2008 were...