Commodities : Oil
Oil demand :
Oil belongs to the category of energy. It has several uses:
- Fuels: These are the main uses of oil
- Fuels: Oil is used as heating oil or as fuel oil in industry
- Lubricants: Oil is found in the constitution of several oils including engine oil
- Bitumens: Oil is used for road paving, sealing of buildings, insulation, corrosion …
- The gas: The oil is present only for domestic use
- The petrochemical bases: Oil is used to manufacture all kinds of plastics, synthetic fibers, solvents, rubber.
Hers is the distribution of world oil demand by region in 2007. The main consumer countries are in million tons / year (millions of barrels per day) .
Global consumption now stands at around 3 500 000 tons per year. The share of oil in fossil fuels (oil, gas, coal) is now above 40%, before the coal at 33% and gas at 27%. You should know that one ton is approximately equal to a 7.3 barrels of oil, given that in a barrel there is approximately 159 liters.
The daily consumption amounted to roughly 80 million barrels per day and it is estimated that by 2030, consumption will be equal to 121 million barrels per day.
Oil Supply :
Now let’s have a look to the production. Here is the part of individual producers in world production from 1965 to 2007 for a world production of about 80 million barrels per day in 2007.
There are 3 references for the oil in the world:
The Dubai Fateh (Persian Gulf): crude oil from the Middle East with a density of 32 degrees API (the API level is much higher as oil is lighter and more oil is lighter, its premium is higher. )
The Brent crude oil from the North Sea with a density of 38 ° API used as a benchmark to track crude oil prices in Europe.
WTI (West Texas Intermediate) U.S. crude oil 40 ° API gravity used as a reference on the U.S. market.
The 3 forwards contracts the most important are the NYMEX (New York Mercantile Exchange), WTI contract, the IPE (International Petroleum Exchange, London) Brent contract on SIMEX (Singapore Mercantile Exchange, Singapore) Brent contract.
Oil Evolution :
We estimate that to the level of the actual consumption, we still have another 42 years of oil exploitation. The reserves are in fact approximately of 1.258 billion of barrels.
For the 1st time since 1993, world oil consumption in 2008 decreased by 0.6% due to the economic crisis and lower demand especially in the USA. However, do not put this down as a trend because once the crisis ended, the increase in consumption is expected to resume. Oil is a raw material very sensitive to economic conditions and hence, oil prices are subject to wide variations. These variations are part of speculators who greatly influence prices in the short term.
It is estimated that between 80 and 100 $ per barrel would satisfy both consumers and producers. The producers have in fact cost more and more high because exploration and mining costs are important.