Slide 4 of 25
- World oil prices have tripled from their low point in December 1998 to June this year, pulling product prices up as well. But crude prices are expected to show a gradual decline as increased oil production from OPEC and others enters the world oil market, although the actual path may not be as smooth as that shown on the graph.
- The average price of WTI was almost $30 per barrel in March, but dropped to $26 in April as the market responded to the additional OPEC production.
- However, prices strengthened again, averaging almost $32 in June, as growing gasoline production needs pulled on the crude market in the face of low crude oil and gasoline stocks.
- With the recent OPEC and Saudi Arabian announcements of planned production increases, EIA expects adequate OPEC supplies to be introduced into the market throughout the rest of the year, which should bring WTI crude oil price down somewhat by year end. The OPEC Basket price on July 24 was $25.70, just above the Saudi target.
- These crude oil price projections reflect:
- Fairly low world demand growth during 2000 of 1.6 percent, or 1.2 million barrels per day.
- Non OPEC production growth during 2000 of over 1.0 million barrels per day.
- Growth in Iraqi production of 700 thousand barrels per day from Q1 to Q4 2000. Iraqi production is estimated at more than 3.0 million barrels per day in the fourth quarter 2000.
- Growing OPEC leakage over the current OPEC target.