How much is the Terrorist Premium on Oil?

[KissMy]

How much is the Terrorist Premium on Oil?

That is the amount that speculators drove up oil prices banking on making money from another terrorist attack.

From 9/11/2001 until we invaded Iraq in 2003 Crude Oil prices climbed ~35% from $28 to $38 a barrel.

Does that mean the Terrorist Premium on Oil is $10 or is it 35%? Because we just blew through $10 since Osama's death popped the commodities bubble.

Discuss:

 

[FireFly]

Dr. Nansen G. Saleri is President and CEO of Quantum Reservoir Impact. He was chief architect of Saudi Aramco's hugely successful reservoir management and water optimization programs, most notably for Ghawar, the world’s largest field.

Nansen Saleri was just on CNBC this morning saying that any price over $70 oil is a result of terrorist, unrest, war, weather or anything that causes a risk of a supply disruption.

This would put that premium at about 1/3rd of the price of Crude Oil.

There is an OPEC meeting today to increase oil production quotas. The Saudi Prince wants to drive oil price down to $75 a barrel.

Once Qaddafi is gone & the Middle East calms down we should see Crude Oil prices back down near $75.

 

[editec]

I think the primary cause of the rise in oil has little to do with TERROR.

Mostly it has to do with a rise in demand (thanks to emerging markets in Asia) and the recognition that the world supply OIL is finite.

We see the price of oil change as the worlds economic activity waxes and wanes.

Oil IS one of those resources where abundance or scarcity continues to play a large role in price.

Certainly events that chance our perception of SUPPLY will effect today's prices, but in the long run>

In the long run the biggest factor that seems to drive up prices is the growing DEMAND.

 

[Douger]

Terruh ? Move where they aint no terruh.
That's would be counties that don't support IsNtReal.
Yes. These prices are in USD's .

 

[FireFly]

I think the primary cause of the rise in oil has little to do with TERROR.

Mostly it has to do with a rise in demand (thanks to emerging markets in Asia) and the recognition that the world supply OIL is finite.

We see the price of oil change as the worlds economic activity waxes and wanes.

Oil IS one of those resources where abundance or scarcity continues to play a large role in price.

Certainly events that chance our perception of SUPPLY will effect today's prices, but in the long run>

In the long run the biggest factor that seems to drive up prices is the growing DEMAND.

Increased global demand is responsible for taking oil from $20 to $70. The rest of the price increase is pure speculative supply fears. It cost less than $70 a barrel to produce oil from all the sources we are utilizing today. The rest is pure premium.

The death of Osama Bin Laden took $15 off of the price of oil. The death or ouster of Qaddafi will drop the price another $7.

 

[waltky]

Look for the EU to break apart too...

Divided cartel headed for 'slow, painful death'
June 13, 2011 - NO one predicted the outcome of what had been billed as the most crucial OPEC summit for decades.

The cartel of oil producers, riven by civil war and unrest, met in Vienna on Wednesday for the first time this year. Their choice: pump more oil to dampen soaring oil prices and prop up the tottering global economy, or hold output steady to maximise revenues and prop up member governments' faltering positions at home. But the cartel decided to do neither. The summit broke up in disarray, unable to make any decision. Members could not even agree to issue a closing statement. Oil prices rose $US2 afterwards and Ali al-Naimi, the normally tight-lipped Saudi Oil Minister, said that it had been "one of the worst meetings ever". But the Saudis rushed to reassure world markets that they would unilaterally pump more oil to keep the world supplied.

In April, at a function in Tehran to mark OPEC's 50th anniversary, secretary-general Abdalla El-Badri recalled that it had been founded to safeguard members' "legitimate national interests and to ensure order and stability in the international oil market". Yet the cartel has become increasingly polarised between two camps. One is led by Saudi Arabia, the only OPEC member among the G20 club of richest nations, which is worried that high prices will push the global economy back into recession. The other, led by Venezuela and Iran, is not inclined to do the West any favours and does not want oil prices to fall. There have been rifts within OPEC since it was set up, according to David Pumphrey, a senior fellow at the Centre for Strategic and International Studies, but never have they been so marked as now. The rift has crippled OPEC's other founding purpose -- to influence prices.

"OPEC has shown itself to be weak and ineffectual in terms of balancing the market," he said. Some question whether OPEC even has a future. Julian Lee, of the Centre for Global Energy Studies, said: "There is a real danger that OPEC is heading in that direction. But if it's dying, it's going to be a long, drawn-out, painful Shakespearean death. It's fairly dysfunctional at the moment." Saudi Arabia, which is pumping more than 9 million barrels per day, has another estimated 3 million in reserve capacity and will play an increasingly pivotal role in setting oil prices.

Source

 

[Free Thinker]

I agree. Bin Ladens demise and Qaddafi's eventual demise wil have positive lasting effects.

 

[waltky]

OPEC makin' money comin' an' goin'...

Report: OPEC to earn $1 trillion in 2011
July 22, 2011 -- Net oil export earnings of the Organization of Petroleum Exporting Countries will top $1 trillion this year, the Energy Information Administration said citing consolidated figures for the 12 member countries.

EIA, a statistical and analytical agency within the U.S. Department of Energy, said it based its OPEC income projections on its July 2011 short-term energy outlook. Based on those projections, it said, the 12 OPEC members could earn $1.028 trillion of net oil export revenues in 2011 and $1.108 trillion in 2012. OPEC members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Last year, OPEC earned $778 billion in net oil export revenues, a 35 percent increase from 2009, EIA said.

Saudi Arabia earned the largest share of the earnings, $225 billion, representing 29 percent of total OPEC revenues. On a per-capita basis, OPEC net oil export earnings reached $2,074 in 2010. EIA says it collects, analyzes and disseminates independent and impartial energy information to promote sound policymaking, efficient markets and public understanding of energy and its interaction with the economy and the environment. Its frequent reports on OPEC's performance include estimates of the group's net oil export revenues, oil production and consumption.

The overall income figures are based on analysis of the various statistics collected from diverse sources. "We assume that these exports are sold at prevailing spot prices. For countries that export several different crude varieties, we assume that the proportion of total net oil exports represented by each variety is equal to the proportion of the total domestic production represented by that variety," EIA said. "In other words, if we assume that Arab Medium represents 20 percent of total oil production in Saudi Arabia, then we assume that Arab Medium represents 20 percent of total net oil exports from Saudi Arabia," EIA said.

The forecasts are independent of approval by any other officer or employee of the U.S. government. EIA said. At the end of 2009, OPEC had proven oil reserves of 1.06 trillion barrels of crude oil, representing 79.6 percent of the world total of 1.3 trillion barrels, the organization says on its Web site. Outlook for oil as a source of energy remains strong. Oil prices remain around $100 barrel in response to natural disasters, political upheavals in the Middle East and Africa and uncertain recovery from the 2008-09 downturn. Almost all new demand is sourced by analysts to Asian growth.

Crude oil prices settled less than $99 per barrel Friday morning on the New York Mercantile Exchange after touching a seven-week high Thursday of more than $100 per barrel. EIA's own outlook said the market will remain tight for the foreseeable future as growing demand from emerging economies for liquid fuels and slowing non-OPEC supply growth maintain upward pressure on oil prices. The International Energy Agency in Paris forecast oil prices to average $98 per barrel this year and $103 per barrel in 2012.

Read more: Report: OPEC to earn $1 trillion in 2011 - UPI.com

 

[waltky]

OPEC tryin' to keep prices from dropping...

OPEC cuts oil production and demand outlook
September 12, 2011: OPEC cut its forecast Monday for global oil demand and production, citing the slowing economic recovery.

In a monthly report, the Organization of Petroleum Exporting Countries said it expected demand growth to drop to 1.1 million barrels per day -- 150,000 barrels per day fewer than its earlier forecasts. OPEC also trimmed back its oil production outlook, saying it still expects output to increase, but by a slightly smaller 500,000 barrels per day in 2011 -- 80,000 barrels below its prior forecast. "The downward adjustment has been due to a weaker-than-expected driving season in the US and the ongoing sluggish economic performance in the OECD," said the report, referring to an organization of 32 member nations that includes the United States., the United Kingdom, Germany and Japan.

OPEC said weaker-than-expected demand from China and "ongoing economic uncertainties" were reflective of a global slowdown in industrial activity in most major economies. OPEC noted that the forecast for global economic growth had edged down to 3.6% for 2011 from the previous forecast of 3.7%, and down to 3.9% for 2012 from the previously expected 4%. Meanwhile, U.S. crude oil prices have dropped 4.5% year-to-date to about $88 per barrel. Goldman Sachs analysts forecast U.S. crude will average $126.50 a barrel next year.

Prices "remain strong despite the market's concerns that rising sovereign debt issues and a significant slowdown in economic growth could push the U.S. economy back into recession," said Goldman analysts in a weekly energy report. Goldman Sachs said the "tight" oil supply has been alleviated somewhat by the release of 600,000 barrels per day, over the last seven weeks, by the Strategic Petroleum Reserve. But this won't last forever. "We therefore expect that the market will tighten further for the remainder of the year and going into next year as this source of supply disappears, effectively drawing down OPEC spare capacity and pushing prices higher," wrote Goldman analysts David Greely and Stefan Wieler.

Goldman also reiterated its forecast for Brent oil prices to average $130 per barrel next year. Brent, the European benchmark, is currently trading at around $113 a barrel. U.S. gas prices are closely tied to the European benchmark, with many U.S. refineries using imported oil to produce gas, especially on the East Coast. The nationwide average price for regular unleaded fell six-tenths of a cent to $3.649 per gallon Monday, according to motorist group AAA. The average price is down 46.5 cents, or about 11.3%, from the record high of $4.114 reported on July 17, 2008.

Source

 

[Mr. H.]

Terruh ? Move where they aint no terruh.
That's would be counties that don't support IsNtReal.
Yes. These prices are in USD's .

State owned, State run, State controlled. In litres BTW.