The price of petroleum as quoted in news generally refers to the spot price of either WTI/Light Crude as traded on the New York Mercantile Exchange (NYMEX) for delivery at Cushing, Oklahoma, or of Brent as traded on the Intercontinental Exchange (ICE, into which the International Petroleum Exchange has been incorporated) for delivery at Sullom Voe. The price of a barrel of oil is highly dependent on both its grade, determined by factors such as its specific gravity or API and its sulphur content, and its location. The vast majority of oil is not traded on an exchange but on an over-the-counter basis.[citation needed] Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the imported refiner acquisition cost, the weighted average cost of all oil imported into the US, as its "world oil price".
2 01-01-2010 09:24:44
Topic: Antartica oil would be hard to extract anyway... (0 replies, posted in Who will own the Antarctic and the oil beneath it's surface?)
There probably is oil under Antarctica, but extracting it would not be easy or cheap. It would be difficult (though not impossible) to keep the oil exploration and drilling teams alive in such a climate. And once you get the oil to the surface, what then? A pipeline would need to be built to the coast, and once there, a major port would have to be built. None of that infrastructure exists right now and it would costs billions of dollars to build it. It can certainly be done, but again, it'll be difficult in more ways than one and possibly not economically viable at current prices.
One other potential problem could be international law. I'm not sure what's on the books regarding Antarctica, but there may or may not be treaties prohibiting any economic development on the continent.
3 01-01-2010 09:15:31
Topic: Mexico is in big debt, oil revenues down 40 percent in 2010 (0 replies, posted in Is Mexico running out of oil and will this affect US oil supplies?)
It's not hard to see that since early 2008 Mexico's deficit has grown to unsustainable levels. There are two major reasons for this escalation: a severe contraction in the Mexican economy and plummeting oil revenues.
As to the first point, Mexico's economy declined at a rate of more than 10 percent in the second quarter and at a rate of more than 6 percent in the quarter ended September 30. Analysts estimate that Mexico's economy shrank 7 percent in 2009.
And the nation's recovery doesn't look robust: Analysts expect the Mexican economy to grow 2.95 percent in 2010 and just 3.25 percent in 2011. The health of Mexico's economy depends heavily on what transpires in the US; unlike Brazil, China and India, there is little chance of the Mexican economy decoupling from the fortunes of its northern neighbour.
The second problem is just as insidious and has been building for some time. Mexico's crude production topped out at 3.4 million barrels per day in 2004, declined to 3 million barrels per day in 2007 and 2.8 million barrels per day in 2008.
According to PEMEX's estimates, production will total just 2.5 million barrels per day in 2010, and exports will be in the neighborhood of 1.1 million barrels per day--down over 40 percent from 2004.
This forecast has major implications for Mexico's fiscal health. State-owned PEMEX is the sole producer of crude oil and natural gas in Mexico; the company’s oil-related export revenues account for roughly 40 percent of Mexico's budget.
Mexico's two largest oilfields are Cantarell and Ku Maloob Zaap (KMZ), both offshore fields located in the Gulf of Campeche. Taken together, these two fields produced around 1.7 million barrels of oil per day in 2008, roughly 60 percent of the country's total production.
In the case of Cantarell, the project appears to have accelerated the subsequent rate of decline. As of May 2009, production from Cantarell had dropped to less than 700,000 barrels per day, its lowest level since the early 1980s!