THE EXPECTED IMPACT OF THE CRISIS ON THE OIL
MARKET CONDITIONS
Crude oil prices reached a record high of US$ 147 per barrel (US$/b) in July 2008 on the back of a six-year commodity boom cycle driven mostly by demand from developing countries.1 However, as of August 2008, oil prices plunged rapidly as demand from the Organisation for Economic Co-operation and Development (OECD) countries came to a sudden halt and recession loomed as the financial crisis severely
impacted the global economy (IDS, 2008, p. 5). In an attempt to curb falling prices, the Organization of Petroleum Exporting Countries (OPEC) introduced a series of cuts in output. At the time of writing, oil prices have begun to stabilize at levels ranging in the mid US$ 40 per barrel
OIL DEMAND
According to the EIU, world oil demand is falling. It is estimated that demand fell by 0.2 per cent in 2008 and expected to fall by 0.4 per cent in 2009. Plummeting world demand is largely driven by falling consumption in developed countries. Indeed, preliminary estimates point to a decline of 2.9 per cent in oil
demand in OECD countries in 2008. A further drop of 1.8 per cent is also forecast in 2009. Reduction in demand in OECD countries is largely due to falling demand in North America, estimated at about 2 per cent in 2009, and in Europe, estimated at 1.7 per cent.
Non-OECD demand for oil is forecast to grow by 1.4 per cent in 2009 and by 2.3 per cent in 2010.Underpinning these estimates is the expected increase in demand in developing countries. However, even if that demand is expected to increase, it will not be sheltered from the consequences of the global economic turmoil, as it is forecast to grow at a slower pace over the short-to-medium term. Broadly speaking, growing oil demand in developing countries has recently been driven by two major components, namely increasing demand in both China and India and Arab oil-exporting countries. Hence, the extent to which oil demand in developing countries will be impacted largely depends on the underlying elements in each of the abovementioned components. The expected slowdown in the demand for oil in emerging countries is greatly dependent on the demand outlook in China and India which is, in turn, related to their growth prospects.According to the EIU, Chinese oil consumption will grow by just 2.5 per cent in 2009 (down from a 4.8 per cent growth the previous year), and by 3.5 per cent in 2010.
Thursday, March 18, 2010
‘Pakistan’s oil reserves will last only 6 days’
Islamabad, Jan 26 (IANS) Pakistan’s petroleum reserves will last only six days and its furnace oil stock will run out in nine days, a media report said Monday.Confirming this, Petroleum Ministry Additional Secretary G.A. Sabri told GEO TV: “We are currently importing petroleum products based on 10 days’ inventory keeping in view the dollar constraints.”
According to data available with GEO TV, in the corresponding period of the last year, the country had petrol reserves for 20 days and furnace oil for 21 days.
Pakistan annually requires some 60 million tonnes of oil, two-thirds of which is imported. Oil meets about 43.5 percent of the nation’s primary energy needs, natural gas 38.3 percent and coal 5.1 percent, while the remainder is met by hydro-electricity and nuclear power.
More at : ‘Pakistan’s oil reserves will last only 6 days’
Islamabad, Jan 26 (IANS) Pakistan’s petroleum reserves will last only six days and its furnace oil stock will run out in nine days, a media report said Monday.Confirming this, Petroleum Ministry Additional Secretary G.A. Sabri told GEO TV: “We are currently importing petroleum products based on 10 days’ inventory keeping in view the dollar constraints.”
According to data available with GEO TV, in the corresponding period of the last year, the country had petrol reserves for 20 days and furnace oil for 21 days.
Pakistan annually requires some 60 million tonnes of oil, two-thirds of which is imported. Oil meets about 43.5 percent of the nation’s primary energy needs, natural gas 38.3 percent and coal 5.1 percent, while the remainder is met by hydro-electricity and nuclear power.
More at : ‘Pakistan’s oil reserves will last only 6 days’
Wednesday, March 17, 2010
oil consumption per day
This entry is the total oil consumed in barrels per day (bbl/day). The discrepancy between the amount of oil produced and/or imported and the amount consumed and/or exported is due to the omission of stock changes, refinery gains, and other complicating factors.
See also: Oil - consumption bar chart
Country Name Value
United States 20,800,000
China 6,930,000
Japan 5,353,000
Russia 2,916,000
Russia 2,916,000
Germany 2,618,000
India 2,438,000
Canada 2,290,000
Korea, South 2,130,000
Brazil 2,100,000
Mexico 2,078,000
Saudi Arabia 2,000,000
France 1,999,000
United Kingdom 1,820,000
Italy 1,732,000
Iran 1,630,000
Spain 1,600,000
Indonesia 1,100,000
Netherlands 1,011,000
Thailand 929,000
Australia 903,200
Taiwan 816,700
Singapore 802,000
Turkey 660,800
Egypt 635,000
Venezuela 599,000
Belgium 591,000
South Africa 519,000
Malaysia 501,000
Argentina 480,000
Poland 462,700
Greece 415,700
United Arab Emirates 372,000
Sweden 363,200
Pakistan 345,000
Philippines 340,000
Kuwait 333,000
Portugal 305,800
Nigeria 302,000
Austria 295,100
Iraq 295,000
Hong Kong 292,000
This entry is the total oil consumed in barrels per day (bbl/day). The discrepancy between the amount of oil produced and/or imported and the amount consumed and/or exported is due to the omission of stock changes, refinery gains, and other complicating factors.
See also: Oil - consumption bar chart
Country Name Value
United States 20,800,000
China 6,930,000
Japan 5,353,000
Russia 2,916,000
Russia 2,916,000
Germany 2,618,000
India 2,438,000
Canada 2,290,000
Korea, South 2,130,000
Brazil 2,100,000
Mexico 2,078,000
Saudi Arabia 2,000,000
France 1,999,000
United Kingdom 1,820,000
Italy 1,732,000
Iran 1,630,000
Spain 1,600,000
Indonesia 1,100,000
Netherlands 1,011,000
Thailand 929,000
Australia 903,200
Taiwan 816,700
Singapore 802,000
Turkey 660,800
Egypt 635,000
Venezuela 599,000
Belgium 591,000
South Africa 519,000
Malaysia 501,000
Argentina 480,000
Poland 462,700
Greece 415,700
United Arab Emirates 372,000
Sweden 363,200
Pakistan 345,000
Philippines 340,000
Kuwait 333,000
Portugal 305,800
Nigeria 302,000
Austria 295,100
Iraq 295,000
Hong Kong 292,000
oil problem in pakistan
The problem with Pakistan is that we have not explored our land and off Shore assets properly and resource developement activities are Nil because of Unstable Economy. Major Players in Oil only come forward when Exploration Studies are conducted in a allocated area by GOP. Pakistan has a vast Potential of Oil and to date 833 Million Barrels of Oil reserve are there. But it is only 5% of the exploration conducted on the In and OFF Shore areas.
Oil Exploration is not a child's Play but requires a open resource developement and Energy policy to make Private Companies and Investors to take interest and requires consistency in policy which pakistan lacks since it came into being.
Pakistan contains two sedimentary basins: Indus in the east and Balochistan in the west.The Indus basin has received sediments from precambrian until Recent, albeit with breaks.It has been producing hydrocarbons since 1914 from three main producing regions, namely, the Potwar, Sulaisman, and Kirthar.In the Potwar, oil has been discovered in Cambrian, Permian, Jurassic, and Tertiary rocks.Potential source rocks are identified in Infra-Cambrian, Permian, Paleocene, and Eocene successions, but Paleocene/Eocene Patala Formation seems to be the main source of most of the oil.In the Sulaiman, gas has been found in Cretaceous and Tertiary; condensate in Cretaceous rocks.Potential source rocks are indicated in Cretaceous, Paleocene, and Eocene successions.The Sembar Formation of Early Cretaceous age appears to be the source of gas.In the Kirthar, oil and gas have been discovered in Cretaceous and gas has been discovered in paleocene and Eocene rocks.Potential source rocks are identified in Kirthar and Ghazij formations of Eocene age in the western part.However, oil- and gas-producing Badin platform area, has recognized the Sembar Formation of Early Cretaceous age as the only source of Cretaceous oil and gas.The Balochistan basin is part of an Early Tertiary arc-trench system.The basin is inadequately explored, and there is no oil or gas discovery so far.However, potential source rocks have been identified in Eocene, Oligocene, Miocene, and Pliocene successions based on geochemical analysis of surface samples.Mud volcanoes are present.
The problem with Pakistan is that we have not explored our land and off Shore assets properly and resource developement activities are Nil because of Unstable Economy. Major Players in Oil only come forward when Exploration Studies are conducted in a allocated area by GOP. Pakistan has a vast Potential of Oil and to date 833 Million Barrels of Oil reserve are there. But it is only 5% of the exploration conducted on the In and OFF Shore areas.
Oil Exploration is not a child's Play but requires a open resource developement and Energy policy to make Private Companies and Investors to take interest and requires consistency in policy which pakistan lacks since it came into being.
Pakistan contains two sedimentary basins: Indus in the east and Balochistan in the west.The Indus basin has received sediments from precambrian until Recent, albeit with breaks.It has been producing hydrocarbons since 1914 from three main producing regions, namely, the Potwar, Sulaisman, and Kirthar.In the Potwar, oil has been discovered in Cambrian, Permian, Jurassic, and Tertiary rocks.Potential source rocks are identified in Infra-Cambrian, Permian, Paleocene, and Eocene successions, but Paleocene/Eocene Patala Formation seems to be the main source of most of the oil.In the Sulaiman, gas has been found in Cretaceous and Tertiary; condensate in Cretaceous rocks.Potential source rocks are indicated in Cretaceous, Paleocene, and Eocene successions.The Sembar Formation of Early Cretaceous age appears to be the source of gas.In the Kirthar, oil and gas have been discovered in Cretaceous and gas has been discovered in paleocene and Eocene rocks.Potential source rocks are identified in Kirthar and Ghazij formations of Eocene age in the western part.However, oil- and gas-producing Badin platform area, has recognized the Sembar Formation of Early Cretaceous age as the only source of Cretaceous oil and gas.The Balochistan basin is part of an Early Tertiary arc-trench system.The basin is inadequately explored, and there is no oil or gas discovery so far.However, potential source rocks have been identified in Eocene, Oligocene, Miocene, and Pliocene successions based on geochemical analysis of surface samples.Mud volcanoes are present.
Tuesday, March 16, 2010
pakistan oil crisis
ISLAMABAD, Dec 10: Pakistan’s oil reserves have plummeted to the lowest-ever level in the country’s history and the stocks of major oil products — kerosene and diesel — are sufficient for six days only.
Under the standard operating procedures (SOPs), the government and its companies are required to maintain a minimum of 21-day stocks of every product at all times to cope with any eventuality. The SOPs are defined in the ‘Blue Book’ meant for strategic government organisations to handle crises.
Informed sources told Dawn that the situation had not aggravated in a day or two. The ministry of petroleum had been informing the government about the situation consistently since late October.
Despite repeated attempts, Petroleum Secretary Farrukh Qayyum and additional secretary Shaukat Hayat Durrani could not be reached for comment.
However, according to petroleum experts, there will be no immediate impact of the depletion on the common man. But the situation can lead to a crisis in future and should be handled with extreme care, they added. Statistics confirmed by sources in the petroleum ministry and oil industry reveal that total kerosene stocks at present stood at less than 3,800 tons, sufficient only for four days.
Pakistan’s current kerosene requirement is 920 tons per day. The country has total kerosene storage capacity for 80 days and the current storage is about nine per cent of the total capacity.
Likewise, current high speed diesel stocks are at around 125,457 tons, which can meet consumption requirement of six days at the average need of about 22,000 tons per day. The country has the capacity to store HSD to the extent of 39 days of requirement. As such, total usable stocks are about 19 per cent of the available capacity.
Light diesel oil, comparatively a low-consumption product, has a stock of about 2,500 tons that is enough for four days, at the rate of 558 tons per day, which is 14 per cent of its total storage capacity of about 42 days of consumption.
The situation is comparatively better for furnace oil, petrol, HOBC and jet fuel as their stocks were enough for 26 days, 15 days, 22 days and 20 days, respectively, are much lower than last year.
The country has storage capacity of these products for 75 days, 33 days, 131 days and 34 days, respectively. This means that only 39 per cent, 49 per cent, 21 per cent and 49 per cent of storage capacity is being utilised at the moment.
The sources said the major reason for the drop in stocks was cash problems faced by the oil companies to have sufficient imports and non-availability of cargo in Arab countries because of advance supply orders.
Secondly, some of the refineries have increased their jet fuel production that directly affects kerosene production because both are alternative products.
The punchline, however, is that kerosene is a subsidised product that affects oil companies’ cash flow in the wake of price differential claim while jet fuel is a cash product and attracts payments in dollars it is sold to allied forces engaged in the “war on terror”.
With no real increase in domestic consumption, Pakistan’s oil import bill was estimated at $8.8 billion when the budget was announced, but this figure was likely to exceed $10 billion, the sources said.
The government had estimated that crude price would not exceed 70 dollars per barrel, but it went up as high as 98 dollars per barrel.
Diesel is usually described as ‘killer fuel’ because of its harmful impact on the environment. About 7.5 million tons of diesel was consumed in the country, as against a total oil consumption of 17.5 million tons. Furnace oil has the second largest share and remains in the range of 5-7 million tons depending upon power production requirements.
ISLAMABAD, Dec 10: Pakistan’s oil reserves have plummeted to the lowest-ever level in the country’s history and the stocks of major oil products — kerosene and diesel — are sufficient for six days only.
Under the standard operating procedures (SOPs), the government and its companies are required to maintain a minimum of 21-day stocks of every product at all times to cope with any eventuality. The SOPs are defined in the ‘Blue Book’ meant for strategic government organisations to handle crises.
Informed sources told Dawn that the situation had not aggravated in a day or two. The ministry of petroleum had been informing the government about the situation consistently since late October.
Despite repeated attempts, Petroleum Secretary Farrukh Qayyum and additional secretary Shaukat Hayat Durrani could not be reached for comment.
However, according to petroleum experts, there will be no immediate impact of the depletion on the common man. But the situation can lead to a crisis in future and should be handled with extreme care, they added. Statistics confirmed by sources in the petroleum ministry and oil industry reveal that total kerosene stocks at present stood at less than 3,800 tons, sufficient only for four days.
Pakistan’s current kerosene requirement is 920 tons per day. The country has total kerosene storage capacity for 80 days and the current storage is about nine per cent of the total capacity.
Likewise, current high speed diesel stocks are at around 125,457 tons, which can meet consumption requirement of six days at the average need of about 22,000 tons per day. The country has the capacity to store HSD to the extent of 39 days of requirement. As such, total usable stocks are about 19 per cent of the available capacity.
Light diesel oil, comparatively a low-consumption product, has a stock of about 2,500 tons that is enough for four days, at the rate of 558 tons per day, which is 14 per cent of its total storage capacity of about 42 days of consumption.
The situation is comparatively better for furnace oil, petrol, HOBC and jet fuel as their stocks were enough for 26 days, 15 days, 22 days and 20 days, respectively, are much lower than last year.
The country has storage capacity of these products for 75 days, 33 days, 131 days and 34 days, respectively. This means that only 39 per cent, 49 per cent, 21 per cent and 49 per cent of storage capacity is being utilised at the moment.
The sources said the major reason for the drop in stocks was cash problems faced by the oil companies to have sufficient imports and non-availability of cargo in Arab countries because of advance supply orders.
Secondly, some of the refineries have increased their jet fuel production that directly affects kerosene production because both are alternative products.
The punchline, however, is that kerosene is a subsidised product that affects oil companies’ cash flow in the wake of price differential claim while jet fuel is a cash product and attracts payments in dollars it is sold to allied forces engaged in the “war on terror”.
With no real increase in domestic consumption, Pakistan’s oil import bill was estimated at $8.8 billion when the budget was announced, but this figure was likely to exceed $10 billion, the sources said.
The government had estimated that crude price would not exceed 70 dollars per barrel, but it went up as high as 98 dollars per barrel.
Diesel is usually described as ‘killer fuel’ because of its harmful impact on the environment. About 7.5 million tons of diesel was consumed in the country, as against a total oil consumption of 17.5 million tons. Furnace oil has the second largest share and remains in the range of 5-7 million tons depending upon power production requirements.
Monday, March 15, 2010
'Peak Oil Crisis'
It is a Peak Oil news and resource site for those interested in the issue of Peak Oil. We are UK based but are interested in stories from anywhere this global problem manifests itself.
For those of you who haven't come across this phrase before, the term Peak Oil is used to describe the global maximum in conventional crude oil production which is predicted to happen in the not too distant future (if it hasn't happened already). The concept was devised by geologist Marion King Hubbert who worked for oil company Shell and who correctly predicted that in 1970 the crude oil production within the United States would peak and then decline. He then went on to say that the same thing would happen to world crude oil production eventually.
Once this maximum (or peak) has been reached global oil production will generally decline forever afterwards. It is something that will only become apparent some time after the event has happened due to fluctuations in oil production from year to year.
At the moment it appears that oil production is on a plateau with a peak occurring sometime in 2006. Production is struggling to stand still let alone increase. It is thought that global oil production from mature oil fields is declining at a rate of between 6-7% per year. This means that at current oil demand, around another 5 million barrels of new oil (crude & other liquid fuels) per day must come on line per year. This is just about happening at the moment but is getting harder everyday at oil becomes more difficult, expensive and energy intensive to extract. Also as a result of the current world economic problems and lower prices oil exploration activity has been curtailed significantly.
Peak Oil is thought to occur when roughly half of the world's oil reserves have been used up. All oil fields peak and then decline by their very nature and the concept of global Peak Oil is simply the extrapolation of this idea to the sum of all known oil fields. Peak Oil is thought to be imminent because there have been fewer 'super giant' oil field discoveries in recent years to put any potential peak in production further into the future.
It is a Peak Oil news and resource site for those interested in the issue of Peak Oil. We are UK based but are interested in stories from anywhere this global problem manifests itself.
For those of you who haven't come across this phrase before, the term Peak Oil is used to describe the global maximum in conventional crude oil production which is predicted to happen in the not too distant future (if it hasn't happened already). The concept was devised by geologist Marion King Hubbert who worked for oil company Shell and who correctly predicted that in 1970 the crude oil production within the United States would peak and then decline. He then went on to say that the same thing would happen to world crude oil production eventually.
Once this maximum (or peak) has been reached global oil production will generally decline forever afterwards. It is something that will only become apparent some time after the event has happened due to fluctuations in oil production from year to year.
At the moment it appears that oil production is on a plateau with a peak occurring sometime in 2006. Production is struggling to stand still let alone increase. It is thought that global oil production from mature oil fields is declining at a rate of between 6-7% per year. This means that at current oil demand, around another 5 million barrels of new oil (crude & other liquid fuels) per day must come on line per year. This is just about happening at the moment but is getting harder everyday at oil becomes more difficult, expensive and energy intensive to extract. Also as a result of the current world economic problems and lower prices oil exploration activity has been curtailed significantly.
Peak Oil is thought to occur when roughly half of the world's oil reserves have been used up. All oil fields peak and then decline by their very nature and the concept of global Peak Oil is simply the extrapolation of this idea to the sum of all known oil fields. Peak Oil is thought to be imminent because there have been fewer 'super giant' oil field discoveries in recent years to put any potential peak in production further into the future.
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