opec’s perspective on oil market developments · 1 organization of the petroleum exporting...

1

Organization of the Petroleum Exporting CountriesOrganization of the Petroleum Exporting Countries

OPECOPEC’’s perspectives perspectiveonon

oil market developments oil market developments

7th APEC Energy Ministers’ Meeting

19 October 2005Gyeongju, Republic of Korea

Dr Adnan Shihab-EldinActing for the Secretary General

2

Strong growth in APEC economies (e.g, China): growing faster than the world with significant contribution to the global GDPGlobalization process (export-led growth, increasing role of FDI)

-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006

USA

APECWorld

Japan

China

(%)

Rates of economic growth(real terms, at 1995 PPP)

-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006

USA

APECWorld

Japan

China

(%)


-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006

USA

APECWorld

Japan

China

(%)


-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006

USA

APECWorld

Japan

China

(%)


-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006

USA

APECWorld

Japan

China

(%)


-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006

USA

APECWorld

Japan

China

(%)


As the most economically dynamic region in the world, the Asia-Pacific now accounts ~ 60% of global energy demand. The first 3 largest oil consumers are within APEC

17 2137

24 13

243

6

12

61 56

0

10

20

30

40

50

60

70

80

GDP incre

ment

World

GDP

APEC GDP

USA China Japan APEC

(%)

Contribution of APEC economies

17 2137

24 13

243

6

12

61 56

0

10

20

30

40

50

60

70

80

GDP incre

ment

World

GDP

APEC GDP

USA China Japan APEC

(%)

Contribution of APEC economies

World economic growth & APEC economiesWorld economic growth & APEC economies

3

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas

Reserves Production Demand

(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


APEC oil & gas profile: 2004

(%)

% shares of the wordl : 2004

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


APEC oil & gas profile

(%)

% shares of the world: 2004

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas



(%)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas



(%)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


APEC oil & gas profile

(%)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


APEC oil & gas profile: 2004(%

)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


APEC oil & gas profile(%

)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas



)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas



)


13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


(%)

13

3837

5859 54

0

10

20

30

40

50

60

70

80

Oil N.gas


APEC oil & gas profile(%

)


-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

mb/

d

mb/

d

2004 was the highest oil demand growth in 25 years.

Last 3 years avg: 1.9Last 10 years avg: 1.4Last 20 years avg: 1.2

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

mb/

d

mb/

d

2004 was the highest oil demand growth in 25 years.


Oil demand growth (mb/d)

Oil demand growth (mb/d)

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2000 2001 2002 2003 2004 2005 2006*

USA China Others


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2000 2001 2002 2003 2004 2005 2006*

USA China Others


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2000 2001 2002 2003 2004 2005 2006*

USA China Others


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2000 2001 2002 2003 2004 2005 2006*

USA China Others


0369

121518212427

India

China

Brazil

UK USA

Oil demand, barrels per capita per year

0369

121518212427

India

China

Brazil

UK USA


Per capita oil demand ratiosIndia China

Brazil 6 3UK 14 7USA 34 16

0369

121518212427

India

China

Brazil

UK USA


0369

121518212427

India

China

Brazil

UK USA




0369

121518212427

India

China

Brazil

UK USAOil demand, barrels per capita per year

0369

121518212427

India

China

Brazil




0369

121518212427

India

China

Brazil


0369

121518212427

India

China

Brazil




4

1.1

0.5

1.30.8

-0.8

-0.3

0.3

0.8

1.3

1.8

2000 2001 2002 2003 2004 2005 2006*-0.8

-0.3

0.3

0.8

1.3

1.8

C h i n a OECD Pacific OECD W.Europe OECD N.America

Total DCs Fsu- ex Russia Net Non-OPEC

Russia

Last 3y avg: 0.9

Last 10y avg: 0.8

Last 20y avg: 0.4

1.1

0.5

1.30.8

-0.8

-0.3

0.3

0.8

1.3

1.8

2000 2001 2002 2003 2004 2005 2006*-0.8

-0.3

0.3

0.8

1.3

1.8



Russia

Last 3y avg: 0.9

Last 10y avg: 0.8

Last 20y avg: 0.4

1.1

0.5

1.30.8

-0.8

-0.3

0.3

0.8

1.3

1.8

2000 2001 2002 2003 2004 2005 2006*-0.8

-0.3

0.3

0.8

1.3

1.8



Russia

Last 3y avg: 0.9

Last 10y avg: 0.8

Last 20y avg: 0.4

1.1

0.5

1.30.8

-0.8

-0.3

0.3

0.8

1.3

1.8

2000 2001 2002 2003 2004 2005 2006*-0.8

-0.3

0.3

0.8

1.3

1.8



Russia

Last 3y avg: 0.9

Last 10y avg: 0.8

Last 20y avg: 0.4

Non-OPEC supplyyear-on-year change, mb/d

Non-OPEC supplyyear-on-year change, mb/d

81

100

32

124 3 2

0

20

40

60

80

100

120

North S

ea US

Canada

Mexico KZ

India

Ecuad

or2005: estimated production losses (mb)

It would equate to ~ 650tb/d.81

100

32

124 3 2

0

20

40

60

80

100

120

North S

ea US

Canada

Mexico KZ

India

Ecuad

or2005: estimated production losses (mb)

It would equate to ~ 650tb/d.

81

100

32

124 3 2

0

20

40

60

80

100

120

North S

ea US

Canada

Mexico KZ

India

Ecuad

or

2005: estimated production losses (mb)

It would equate to ~ 650tb/d.81

100

32

124 3 2

0

20

40

60

80

100

120

North S

ea US

Canada

Mexico KZ

India

Ecuad

or

2005: estimated production losses (mb)

It would equate to ~ 650tb/d.

Russian oil supply growth

0

100

200

300

400

500

600

700

800

900

Jan-

04Fe

b-04

Mar-0

4Ap

r-04

May-

04Ju

n-04

Jul-0

4Au

g-04

Sep-

04Oc

t-04

Nov-

04De

c-04

Jan-

05Fe

b-05

Mar-0

5Ap

r-05

May-

05Ju

n-05

Jul-0

5Au

g-05

Sep-

05Oc

t-05

Nov-

05De

c-05

mb/

d

-1%0%1%2%3%4%5%6%7%8%9%10%11%

y-o-

ygro

wth,

%

Volume % growth


0

100

200

300

400

500

600

700

800

900

Jan-

04Fe

b-04

Mar-0

4Ap

r-04

May-

04Ju

n-04

Jul-0

4Au

g-04

Sep-

04Oc

t-04

Nov-

04De

c-04

Jan-

05Fe

b-05

Mar-0

5Ap

r-05

May-

05Ju

n-05

Jul-0

5Au

g-05

Sep-

05Oc

t-05

Nov-

05De

c-05

mb/

d

-1%0%1%2%3%4%5%6%7%8%9%10%11%

y-o-

ygro

wth,

%

Volume % growth

0

100

200

300

400

500

600

700

800

900

Jan-

04Fe

b-04

Mar-0

4Ap

r-04

May-

04Ju

n-04

Jul-0

4Au

g-04

Sep-

04Oc

t-04

Nov-

04De

c-04

Jan-

05Fe

b-05

Mar-0

5Ap

r-05

May-

05Ju

n-05

Jul-0

5Au

g-05

Sep-

05Oc

t-05

Nov-

05De

c-05

mb/

d

-1%0%1%2%3%4%5%6%7%8%9%10%11%

y-o-

ygro

wth,

%

Volume % growth

While growth in non-OPEC supply up to 2003 were exceeding that of demand, since then had been significantly below demand growth However, Non-OPEC supply in 2005 has been affected by unplanned shut-downs & a lower rate of growth from RussiaGradual recovery & growth in West Africa, Brazil, Canada & FSU


0

100

200

300

400

500

600

700

800

900

Jan-

04Fe

b-04

Mar-0

4Ap

r-04

May-

04Ju

n-04

Jul-0

4Au

g-04

Sep-

04Oc

t-04

Nov-

04De

c-04

Jan-

05Fe

b-05

Mar-0

5Ap

r-05

May-

05Ju

n-05

Jul-0

5Au

g-05

Sep-

05Oc

t-05

Nov-

05De

c-05

mb/

d

-1%0%1%2%3%4%5%6%7%8%9%10%11%

y-o-

ygro

wth,

%

Volume % growth


0

100

200

300

400

500

600

700

800

900

Jan-

04Fe

b-04

Mar-0

4Ap

r-04

May-

04Ju

n-04

Jul-0

4Au

g-04

Sep-

04Oc

t-04

Nov-

04De

c-04

Jan-

05Fe

b-05

Mar-0

5Ap

r-05

May-

05Ju

n-05

Jul-0

5Au

g-05

Sep-

05Oc

t-05

Nov-

05De

c-05

mb/

d

-1%0%1%2%3%4%5%6%7%8%9%10%11%

y-o-

ygro

wth,

%

Volume % growth

0

100

200

300

400

500

600

700

800

900

Jan-

04Fe

b-04

Mar-0

4Ap

r-04

May-

04Ju

n-04

Jul-0

4Au

g-04

Sep-

04Oc

t-04

Nov-

04De

c-04

Jan-

05Fe

b-05

Mar-0

5Ap

r-05

May-

05Ju

n-05

Jul-0

5Au

g-05

Sep-

05Oc

t-05

Nov-

05De

c-05

mb/

d

-1%0%1%2%3%4%5%6%7%8%9%10%11%

y-o-

ygro

wth,

%

Volume % growth

5

30.0

29.1

27.0

25.4

4.6

1.6

3.726.9

28.328.9

21

23

25

27

29

31

2002 2003 2004 2005*0

1

2

3

4

5IraqOPEC-10OPEC-11 cumulative change (since 2002)Call of OPEC

Note: OPEC production excludes OPEC NGL & non-conventional oil (estimated to be 4.3 mb/d in 2005).

*/ based on actual OPEC production until September and then maintaining September levels for the rest of the year.

OPEC response:additional supplies on the market by using the spare capacity (>4mb/d)accelerated projects to expand production capacity to meet rising demand & maintain spare capacity

30.0

29.1

27.0

25.4

4.6

1.6

3.726.9

28.328.9

21

23

25

27

29

31

2002 2003 2004 2005*0

1

2

3

4





30.0

29.1

27.0

25.4

4.6

1.6

3.726.9

28.328.9

21

23

25

27

29

31

2002 2003 2004 2005*0

1

2

3

4





30.0

29.1

27.0

25.4

4.6

1.6

3.726.9

28.328.9

21

23

25

27

29

31

2002 2003 2004 2005*0

1

2

3

4





Source: OPEC

Cumulative increase:Demand, OPEC, Non- OPEC (mb/d)

4.14.6

1.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2003 2004 2005

mb/

d

Demand OPEC (Crude + NGLs) Non OPEC Total SupplySource: OPEC


4.14.6

1.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2003 2004 2005

mb/

d

Demand OPEC (Crude + NGLs) Non OPEC Total Supply

Source: OPEC


4.14.6

1.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2003 2004 2005

mb/

d

Demand OPEC (Crude + NGLs) Non OPEC Total SupplySource: OPEC


4.14.6

1.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2003 2004 2005

mb/

d

Demand OPEC (Crude + NGLs) Non OPEC Total Supply

O E C D com m ercia l o il s tocks

2300

2400

2500

2600

2700

2800

2900

Jan Feb M ar Apr M ay Jun Jul Aug Sep O c t N ov D ec2300

2400

2500

2600

2700

2800

2900

A vg. 00-04

2004

2005

M in-M ax range : 1994 -2004

A vg.00-04

2003

2004

51

48

50

52

54

56

58

Jan Feb M ar Apr M ay Jun Jul Aug Sep O ct N ov D ec

48

50

52

54

56

58C los ing levels , m b D ays of forw ard c over

O E C D com m ercia l o il s tocks

2300

2400

2500

2600

2700

2800

2900

Jan Feb M ar Apr M ay Jun Jul Aug Sep O c t N ov D ecJan Feb M ar Apr M ay Jun Jul Aug Sep O c t N ov D ec2300

2400

2500

2600

2700

2800

2900

A vg. 00-04

2004

2005

M in-M ax range : 1994 -2004

A vg.00-04

2003

2004

51

48

50

52

54

56

58

Jan Feb M ar Apr M ay Jun Jul Aug Sep O ct N ov D ec

48

50

52

54

56

58C los ing levels , m b D ays of forw ard c over

OECD commercial oil stocks

2300

2400

2500

2600

2700

2800

2900

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2300

2400

2500

2600

2700

2800

2900

Avg. 00-04

2004

2005

Min-Max range: 1994-2004

Avg.00-04

2003

2004

51

48

50

52

54

56

58

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

48

50

52

54

56

58Closing levels, mb Days of forward cover

OECD commercial oil stocks

2300

2400

2500

2600

2700

2800

2900

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2300

2400

2500

2600

2700

2800

2900

Avg. 00-04

2004

2005

Min-Max range: 1994-2004

Avg.00-04

2003

2004

51

48

50

52

54

56

58

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

48

50

52

54

56

58Closing levels, mb Days of forward cover

OPEC response:higher production leading to significant stock build up

OPEC response:higher production leading to significant stock build up

6

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q0627,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

OPEC 11 OPEC-11 Production, Av. SS Required OPEC crude

OPEC Crude, Production and Requirements in theShort term

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q0627,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000



27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q0627,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000



27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q0627,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

1400

Heavy Medium Light Net Capacity Addition (mb/d)

OPEC gross & net capacity additions by type

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

1400

Heavy Medium Light Net Capacity Addition (mb/d)

OPEC gross & net capacity additions by type

OPEC capacity additions: lighter streamsOPEC capacity additions: lighter streams

7

OPEC-10 capacity expansion(by country)

80

198

238

94200

28

278

70

Algeria Indonesia Iran Kuwait LibyaNigeria Qatar KSA UAE Ven Source: OPEC

70110

70

30025

200

100

100

(end 2004 – end 2005) (end 2005 – end 2006)OPEC-10 capacity expansion

(by country)

80

198

238

94200

28

278

70

Algeria Indonesia Iran Kuwait LibyaNigeria Qatar KSA UAE Ven Source: OPEC

70110

70

30025

200

100

100

(end 2004 – end 2005) (end 2005 – end 2006)

Accelerated OPEC capacity expansion plansAccelerated OPEC capacity expansion plans

26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850

OPEC 10 Iraq Base NGLHigh High (in NGL)

Non-OPEC supply :Increase in non-OPEC supply up to 2010 is expected to be ~5 mb/d, or even moreaccording to some other sources.

Accordingly, increase in total oil supply capacity is expected to reach ~12 mb/d, or more.

26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850

OPEC NGL High High (in NGL)

26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850




26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850


26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850


26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850




26283032343638404244464850

2004 2005 2006 2007 2008 2009 201026283032343638404244464850


8

Refinery utilization trend: shrinking refinery spare capacity!

6 0

6 5

7 0

7 5

8 0

8 5

9 0

9 5

1 9 8 0 1 9 8 4 1 9 8 8 1 9 9 2 1 9 9 6 2 0 0 0 2 0 0 4

US AO EC DW O R L D

S ource: B P S tatis t ic a l R eview , 2005.

Refinery utilization trend: shrinking refinery spare capacity!

60

65

70

75

80

85

90

95

1980 198 4 1988 1992 1996 200 0 2 004

US AO EC DW O R LD

S ource: BP S tatis t ic al Review, 2005.

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2001 2002 2003 2004

USA and Canada Northern EuropeMediterranean Asia

Ratio of conversion total refinery capacity

OPEC S t i t

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2001 2002 2003 2004

USA and Canada Northern EuropeMediterranean Asia

Ratio of conversion total refinery capacity

OPEC S i

O v e r l o a d i n g o f R e f i n i n g I n d u s t r y

* / A s i a = J a p a n , S o u t h K o r e a , C h i n a , I n d i a a n d S i n g a p o r e . F o r s o m e A s i a n c o u n t r i e s M a y i s e s t i m a t e d .

S h r i n k i n g R e f i n i n g S p a r e C a p a c i t y i n k e y r e f i n e r y r e g i o n s

0

1

2

3

4

5

6

7

8

J a n -0 2

J u l -0 2

J a n -0 3

J u l -0 3

J a n -0 4

J u l -0 4

J a n -0 5

m b / d

E U 1 5 & N o r w a y U S A A s i a *

I n c r e a s i n g R e f i n e r y U t i l i z a t i o n R a t e i n k e y m a r k e t s

7 5

8 0

8 5

9 0

9 5

1 0 0

J a n -0 2

J u l -0 2

J a n -0 3

J u l -0 3

J a n -0 4

J u l -0 4

J a n -0 5

%

E U 1 5 & N o r w a y U S A A s i a *

Overloading of Refining Industry

*/Asia = Japan, South K orea, China, India and Singapore. For some Asian countries M ay is estima ted.

Shrinking Refining Spare Capacity in key refinery regions

0

1

2

3

4

5

6

7

8

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

mb/d

EU15 & Norway USA Asia*

Increasing Refinery Utilization Rate in key m arkets

75

80

85

90

95

100

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

%

EU15 & Norway USA Asia*

Tightness in global refinery system Tightness in global refinery system

9

OPEC is attending to rising product demand both domestic & Asia-pacific region, as well as to meet higher product specificationsPursue global downstream investments, particularly in Asia-pacific region By implementing of these plans, they would be able to install over 4.6 mb/d new capacity (i.e. about 3.8 mb/d refinery capacity and 800,000 b/d condensate splitter).Major part of these new capacities will be invested by Saudi Arabia and Kuwait. Similarly most of these projects would be either in the Middle East or in Asia.

Downstream challengesDownstream challenges

Investment needs in the refinery sector: 2005 - 2015Investment needs in the refinery sector: 2005 - 2015Refinery Expansion by

OPEC Member Countries

Total

Under

Consideration

Planning

Construction

0

500

1000

1500

2000

2500

3000

3500

4000

1,400

1,860

578 3,838

Condensate Splitter Unit Expansion

by OPEC Member Countries

Planning

Construction

Total

0

100

200

300

400

500

600

700

800

900

660

146 806

Refinery Expansion by

OPEC Member Countries

Total

Under

Consideration

Planning

Construction

0

500

1000

1500

2000

2500

3000

3500

4000

1,400

1,860

578 3,838

Condensate Splitter Unit Expansion

by OPEC Member Countries

Planning

Construction

Total

0

100

200

300

400

500

600

700

800

900

660

146 806

(up to 2010) (up to 2010)

10

Gains from US gasoline price risesGains from US gasoline price rises

The Washington Post issue of 25 September 2005 calculated that, in the USA, when the average price of a gallon of regular gasoline peaked at $3.07 recently, the nation’s refiners were getting more than three times the amount they earned the year before, when the same gasoline sold for $1.87. However, the companies that pumped oil from the ground gained only 46 %.

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

Components of Retail Gasoline Prices

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

Source: API statistics


$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98


$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98


$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98



0

8

16

24

32

40

48

1-Aug 8-Aug 15-Aug 22-Aug 29-Aug 6-Sep 13-Sep 20-Sep27-Sep 4-Oct0

20

40

60

80

100

120HO - WTI GA - WTI Heating oil (HO) Gasoline (GA) WTI Dubai

(US

$/bb

l)

$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98


$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98



$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98


$1.92$1.52

$1.00

$0.88

$0.46$0.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

March 1981 3-Oct

(per

gal

lon

cons

tant

200

5 $)

TaxesMfg/MktCrude

$3.11$2.98



0

8

16

24

32

40

48

1-Aug 8-Aug 15-Aug 22-Aug 29-Aug 6-Sep 13-Sep 20-Sep 27-Sep 4-Oct0

20

40

60

80

100

120HO - WTI GA - WTI Heat ing oil (HO) Gasoline (GA) WTI Dubai

(US

$/bb

l)

11

Incremental product demand compared with crude and refining capacity expansion

Sources: Capacity estimates based on published reports by different sources as well as Secretariat assessment

Lag in investment will allow capacity build up only as of 2007

1.0

1.5

2.0

2.5

3.0

2005 2006 2007 2008 2009 2010

mb/d

0.0

0.5

1.0

1.5

2.0

2.5

3.0

mb/d

Crude Demand (reference)Demand (tight market) Refining Capacity

After Katrina0.5

0.0

Refinery expansion lagging behind demand growthRefinery expansion lagging behind demand growth

12

Growing use of oil futures as a form of financial instrumentNYMEX hit a record high in 2005 surpassing the record in 2004.The average volume of contracts rose in 2005 to 237 million contracts compared to 179 million contracts in 2003OPEN interest also shows a higher record in 2005 of 792 million contracts compared to 542 million contracts in 2003

Increasing activity in the Futures market Increasing activity in the Futures market

36

43

50

57

64

71

5-Oct-04 30-Nov-04 25-Jan-05 22-Mar-05 17-May-05 12-Jul-05 6-Sep-05600

680

760

840

920

1000

Open interest WTI

(US

$/bb

l)O

pen interest (futures)'000 contracts

NYMEX open interest (futures) vs. WTI price

13

?

0

20

40

60

80

100

Jan-

80Ja

n-81

Jan-

82Ja

n-83

Jan-

84Ja

n-85

Jan-

86Ja

n-87

Jan-

88Ja

n-89

Jan-

90Ja

n-91

Jan-

92Ja

n-93

Jan-

94Ja

n-95

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

0

20

40

60

80

100Average Nominal Real**/ inflation & exchange-rate adjusted.(Base: August 2005=100, US$/b)

?

0

20

40

60

80

100

Jan-

80Ja

n-81

Jan-

82Ja

n-83

Jan-

84Ja

n-85

Jan-

86Ja

n-87

Jan-

88Ja

n-89

Jan-

90Ja

n-91

Jan-

92Ja

n-93

Jan-

94Ja

n-95

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

0

20

40

60

80


Although reaching historical highs in nominal terms, the real value are still well below levels reached in early 1980s.

?

0

20

40

60

80

100

Jan-

80Ja

n-81

Jan-

82Ja

n-83

Jan-

84Ja

n-85

Jan-

86Ja

n-87

Jan-

88Ja

n-89

Jan-

90Ja

n-91

Jan-

92Ja

n-93

Jan-

94Ja

n-95

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

0

20

40

60

80


?

0

20

40

60

80

100

Jan-

80Ja

n-81

Jan-

82Ja

n-83

Jan-

84Ja

n-85

Jan-

86Ja

n-87

Jan-

88Ja

n-89

Jan-

90Ja

n-91

Jan-

92Ja

n-93

Jan-

94Ja

n-95

Jan-

96Ja

n-97

Jan-

98Ja

n-99

Jan-

00Ja

n-01

Jan-

02Ja

n-03

Jan-

04Ja

n-05

0

20

40

60

80


The price of oil: distinguishing between nominal and real, (US$/b)

The price of oil: distinguishing between nominal and real, (US$/b)

Steady decline in oil intensities!

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1975 1980 1985 1990 1995 2000

W orld USA Japan China APEC

Oil intensityboe / PPP-$1,000 (1995) GDP

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1975 1980 1985 1990 1995 2000



0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1975 1980 1985 1990 1995 2000



0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1975 1980 1985 1990 1995 2000



APEC

APEC

14

The strategy recognises important role of oil: in world economy for socio-economic development of OPEC Member Countries

It defines specific objectives, identifies key challenges and explores scenarios for energy scene

It is designed to be robust and adaptive

It provides coherent and consistent vision and framework for OPEC’s future

OPEC Long-Term Strategy 1/2OPEC Long-Term Strategy 1/2

15

Objectives relate to:long-term petroleum revenues of Member Countriesfair and stable pricesrole of oil in meeting future energy demandstability of oil marketsecurity of regular supplies to consumerssecurity of oil demandlegitimate interests of Member Countries in multilateral agreements

The identified key challenges concern:uncertainties surrounding future oil demand (world economy, consuming countries’ policies, technological developments, etc.) supply side, taking into account: resources, potential non-OPEC production, extent and timing of required investment, together with associated uncertainties

OPEC Long-Term Strategy 2/2OPEC Long-Term Strategy 2/2

16

Oil Demand Outlook, mb/dOil Demand Outlook, mb/d

“Four-fifths of the increase in demand of 30 mb/d over the period 2005–2025 comes from developing countries Transportation continues to be the dominant source of growth (~60 %)Many uncertainties: GDP, technology, policy – substantial downside risks

Reference 2010 2015 2020 2025

OECD 51.4 52.7 53.8 54.7DCs 34.4 40.3 46.4 52.8Transition economies 5.1 5.4 5.7 5.9

Total World 90.9 98.4 105.9 113.4

Tight market scenario 93.1 101.9 111.2Soft market scenario 89.2 94.4 99.0

111.299.0

17

OPEC (incl. NGLs)

Reference 2005 2010 2020 2025OECD 20.9 20.9 19.9 19.3DCs excl. OPEC 16.1 18.2 19.4 18.9Russia & Caspian 11.7 13.1 14.9 15.3

Non -OPEC 50.5 54.3 56.8 56.4OPEC (incl. NGLs) 33.1 36.6 49.1 57.0

World 83.6 90.9 105.9 113.4OPEC Market Share % 40 40 46 50

Tight market scenario 33. 7 40.4 53.9Soft market scenario 32.6 32.7 42.6

Oil production outlook, mb/dOil production outlook, mb/d

Key sources of non-OPEC increase: Latin America, Africa, Russia and CaspianOPEC increasingly supplies incremental barrelSignificant medium- to long-term uncertainties

53.942.6

18

Proven reserves 891 billion barrels 78% of world figureProduction > 30 million barrels a day ~ 40% of world figureExports > 21 million barrels a day ~50% of world figure

Cheaper to exploit than non-OPEC oilIncreasing call on OPEC oil in coming years>50% world oil market projected for 2025

Proven CrudeOil Reserves

15.0

21.3

Crude Oil Production

12.4

58.5

Proven GasReserves

9.8

51.0

Gas Marketed Production

7.8

83.0

0

10

20

30

40

50

60

70

80

90

100

Proven CrudeOil Reserves

Crude Oil Production

Proven GasReserves

Gas Marketed ProductionOPEC Middle East OPEC Rest Non-OPEC

ch63.7

29.1

39.2

9.2

Oil Resources

Source : OPEC

P rov en C ru deO il R e s e rv es

1 5 .0

2 1 .3

C ru d e O il P ro d u c tio n

1 2 .4

5 8 .5

P rov en G asR e se rv e s

9 .8

5 1 .0

G a s M a rk e te d P ro d u c tio n

7 .8

8 3 .0

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

8 0

9 0

1 00

P rove n C ru deO il R e serve s

C ru de O il P ro d u ctio n

P rove n G asRe serv e s

G as M arke te d P ro d u ctio nO P E C M id d le E a s t O P E C R e s t No n -O P E C

ch6 3 .7

2 9 .1

3 9 .2

9 .2

P rov en C ru deO il R e s e rv es

1 5 .0

2 1 .3

C ru d e O il P ro d u c tio n

1 2 .4

5 8 .5

P rov en G asR e se rv e s

9 .8

5 1 .0

G a s M a rk e te d P ro d u c tio n

7 .8

8 3 .0

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

8 0

9 0

1 00

P rove n C ru deO il R e serve s

C ru de O il P ro d u ctio n

P rove n G asRe serv e s

G as M arke te d P ro d u ctio nO P E C M id d le E a s t O P E C R e s t No n -O P E C

ch6 3 .7

2 9 .1

3 9 .2

9 .2

Oil Resources

Source : OPEC

Oil resources and availabilityOil resources and availability

19

Dialogue and cooperationDialogue and cooperation

Continued cooperation & genuine dialogue: underlying consensus on handling major issues of mutual concern for the benefit of all.

International Energy Forum; International Energy Agency; APEC;EU-OPEC Energy Dialogue; Euro-Mediterranean Dialogue;EU-Gulf Cooperation Council; Asian Oil and Gas Ministers Round Table; Non-OPEC at OPEC Conferences; OPEC & Non-OPEC experts meetings …

Effective engagement on all interrelated issuesSecurity of supply and demandPrice stabilityEnergy policiesMultilateral issues (e.g., Kyoto Protocol, WTO)Technology (e.g., cleaner oil technologies, CO2 sequestration with EOR)

Shared responsibility

20

Organization of the Petroleum Exporting CountriesOrganization of the Petroleum Exporting Countries

opec’s perspective on oil market developments · 1 organization of the petroleum exporting...

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