A proposed by US President Barack Obama special tax on petroleum is in the industry and the Republican majority in Congress been rejected sharp words. “I do not know where to start. Dumbest idea ever?” Said the well-known for its oil investments billionaire T. Boone Pickens via Twitter.
A spokesman for the Independent Petroleum Association of America (IPAA) referred to the profit slump in energy companies because of low oil prices. “It is not good practice to impose additional costs in such a situation the industry.” The energy analyst James Williams of WTRG Economics spoke of a joke.
What you need to know about the price of oil
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unit
Since oil was originally packed in barrels – barrel in English -, this unit is used in the industry today. A barrel is 159 liters.
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price slide
Since the beginning of the steep decline in mid-2014, the price has more than gedrittelt. At that time, the cost of a barrel depending on the variety, more than 100 dollars, today there are less than 30 dollars. As low oil was last 2003. Background is a tough competition between the traditional oil producers such as Saudi Arabia and new competitors, particularly in North America, the crude solve the complex Fracking Method shale. Observers expect that the oil producers want to flush the unloved competition with high flow rates and dumped out of the market from the Gulf region.
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oils
crude oil is not the same crude oil. There are a number of different varieties – depending on the region. Alone the financial information service Bloomberg lists more than 100 pieces, but which have only a few very important. As a guide, the financial market is the US crude West Texas Intermediate (WTI). Another important species is the North Sea oil Brent.
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quality differences
the types of oil there are serious differences in quality, which also leads to significant price differentials. So the US refiners Flint Hills offered recently only $ 1.50 per barrel of North Dakota Variety Sour. For high-sulfur crude oil could be difficult to process in the refinery.
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futures contracts
For US oil and Brent oil prices on the match of supply and demand are formed. But even these varieties can have a variety of different prices, what does it matter that they are traded in so-called futures contracts. The buyer acquires this oil with different delivery dates. The most traded and therefore most important for investors Futures contract runs for a month.
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OPEC oil price
the oils of the oil cartel OPEC (OPEC) are to the global economy of high importance. From the OPEC headquarters in Vienna the so-called OPEC basket price is calculated once a day. For this report all Member States of the oil cartel – including Saudi Arabia, Kuwait and Nigeria – their respective oil prices, then the so-called basket price of all 13 OPEC varieties is calculated. This average price is, however, always published with a day’s delay, and therefore does not reflect the latest development.
Williams and several of his colleagues pointed out that Obama’s plan has virtually no chance of being implemented by the Republican majority in Congress. Leading members of the party like Steve Scalise from the House of Representatives announced immediately to resistance. Scalise described the plan in Twitter also as “stupid”. According to initial estimates, the tax would of ten dollars per barrel for the consumer mean a 25 cents per gallon (about six euro cents per liter) higher gasoline prices. In the US, not only a new president this year will be selected, but the entire House of Representatives and a third of the Senate.
Milestones the price of oil
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Start of oil production
the first profitable oil drilling will take place mid-19th century. In this time also the first refineries arise. By 1864, the oil price rises to its highest level of 8.06 dollars per barrel (159 liters); adjusted for inflation 128.17 US dollars must then be paid on an annual average. In the following decades, the price remains at a relatively low level, falling sometimes even, for example because of the success of the electric light bulb, the oil in the household is no longer needed for lighting.
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full throttle with gasoline
with the success of the automobile at the beginning 20th century rises the oil demand rapidly; especially in the US, where the Ford Model T is a mass product. 1929 driving a total of 23 million vehicles on the roads. Consumption is 1929 in the States at 2.58 million barrels per day, 85 percent of them for gasoline and heating oil. However, prices remain below five dollars per barrel (not adjusted for inflation), there is also promoted more.
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Negative consequences of the world economic crisis
In the 30s, the Great depression, the business failures, mass unemployment, deflation and a massive decline of trade protectionist measures which were coming has. During the Great Depression, the demand for oil and reduce the price drops to a historic low. In 1931 only still $ 0.65 be paid per barrel (adjusted for inflation around ten US dollars). So cheap black gold should never be again.
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golden age of cheap oil
After the world economy has recovered, the price of oil rises again, but remains constant under five dollars per barrel. For the years between the First World War and the oil crisis in autumn 1973, one therefore speaks of the “golden age” of cheap oil.
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first oil crisis
in the 70s and 80s, the oil price starts to move. As the Organization of Petroleum Exporting Countries (OPEC) after the war between Israel and its Arab neighbors in the fall of 1973 throttles the flow rates in order to exert political pressure, the world oil prices quadrupled in the shortest time. At the end of 1974 will cost a barrel over eleven dollars (adjusted for inflation nearly 55 US dollars). This will also get the average Joe citizens to feel. In Germany Sundays remain empty motorways, in the US, queues form in front of the gas stations
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price explosion during the Gulf War
11 during the second oil crisis in the years 1979/1980 the oil price moves to a short-term decline further. This is triggered essentially by promotion losses and uncertainty after the Islamic Revolution. After the attack on Iraq, Iran and the beginning of the First Gulf War, the prices explode into. At the peak in April 1980 a barrel will cost $ 39.50 (adjusted for inflation $ 116).
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low prices in the 80s and 90s
the 80s and 90s are – apart from the temporary increase caused by the Gulf war – a period of low oil prices. Developed countries are in a recession and were due to previous oil crises with particularly high prices for alternative energy sources. Worldwide, there are over-capacity. During the 1997/1998 Asian crisis, the demand continues to fall. The end of 1998 $ 10.65 per barrel are required.
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A rapid increase
After the crisis the world economy and thus the oil demand growing fast. Even the attacks on the World Trade Center in 2001 provide for a brief pullback. In early 2008 the oil price rises for the first time more than 100 US dollars per barrel, mid-year even almost to 150 dollars. . One reason for the price increase wist the boom of commodity-hungry China, now the second largest consumer of the world
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oil price in 2015
the global financial crisis and a faltering economy provide a drop in demand. At the same time the offer by the massive support in the US (fracking) remains high. The result: the oil price collapses. From summer 2014, the price of Brent oil slips within a few months by around 50 percent to 50 dollars. . In February 2015, the oil price recovered slightly and fluctuates around 60 dollars a barrel
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oil price today
In May 2015, oil prices had recovered in the meantime. The Brent crude reached a high for the year with a price of 68 US dollars per barrel. From there it went to September of year again steeply down at 43 dollars. After a stabilization from September to November, oil prices resumed its tailspin. On January 15, the price of oil fell below the 30-dollar mark.
On the oil market played Obama proposal not matter. The price of a barrel of US oil was unchanged after the announcement at about $ 31.70. The shares of domestic oil producers like Continental Resources barely moved
Obama wants with the proceeds of the planned tax -. Estimated $ 20 billion a year – support sustainable passenger transport in the United States. The proposal will be officially unveiled on Tuesday as part of the budget for the 2017th
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