172 PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
discover a wide range between lower and upper information
share estimations (Baillie et al., 2002).
6.4 The Anatomy of Crude Oil Prices
Crude oil is one of the main natural feedstocks used to meet energy
demands of mankind, and, as a result, price variation has a substantial influence on the society development. The prognoses of the
global and regional volumes of crude oil production, consumption
rates, and the crude oil price are used not only for planning the
national and world economies, but also for development of refining
methodology.
Since the beginning of this century, the energy consumption pattern has been almost unchanged and has involved use of crude oil
(39.3%), natural gas (22.6%), coal (20.8%), renewable sources (3.9%),
hydropower stations) (1.9%), and nuclear energy (10.6%) (IEA,
2008). Despite some prognostications for the depletion of crude oil
reserves in the near future, the structure of energy consumption is
not expected to significantly change. A marginal reduction of the
role of crude oil in energy generation till 2030 and equalization of
the energy balance of crude oil, natural gas and coal is likely until
the mid-point of the 21st century.
As the pain induced by higher oil prices spreads to an ever growing share of the American and world population, pundits and politicians have been quick to blame assorted villains: oil companies,
commodity speculators, OPEC, and domestic policies of the United
States government. While each of these parties has contributed to
and benefited from the increased prices, the sharp growth in petroleum costs is due far more to a combination of soaring international
demand and slackening supply.
Many consumers believe that OPEC member states restrain
crude oil production, and even though international oil markets
efficiently price and allocate the crude oil being produced, some
economists believe that the amount of crude oil being produced is
a function of market power and that this exercise of market power
produces greatly inflates world crude oil prices. For example, the
Middle East with its vast reserves (65% of the world total) and
highly prolific oil wells could have developed reserves to produce
and sell enough oil to satisfy total world demand at under $5 per
barrel and still enjoy substantial government revenues.
discover a wide range between lower and upper information
share estimations (Baillie et al., 2002).
6.4 The Anatomy of Crude Oil Prices
Crude oil is one of the main natural feedstocks used to meet energy
demands of mankind, and, as a result, price variation has a substantial influence on the society development. The prognoses of the
global and regional volumes of crude oil production, consumption
rates, and the crude oil price are used not only for planning the
national and world economies, but also for development of refining
methodology.
Since the beginning of this century, the energy consumption pattern has been almost unchanged and has involved use of crude oil
(39.3%), natural gas (22.6%), coal (20.8%), renewable sources (3.9%),
hydropower stations) (1.9%), and nuclear energy (10.6%) (IEA,
2008). Despite some prognostications for the depletion of crude oil
reserves in the near future, the structure of energy consumption is
not expected to significantly change. A marginal reduction of the
role of crude oil in energy generation till 2030 and equalization of
the energy balance of crude oil, natural gas and coal is likely until
the mid-point of the 21st century.
As the pain induced by higher oil prices spreads to an ever growing share of the American and world population, pundits and politicians have been quick to blame assorted villains: oil companies,
commodity speculators, OPEC, and domestic policies of the United
States government. While each of these parties has contributed to
and benefited from the increased prices, the sharp growth in petroleum costs is due far more to a combination of soaring international
demand and slackening supply.
Many consumers believe that OPEC member states restrain
crude oil production, and even though international oil markets
efficiently price and allocate the crude oil being produced, some
economists believe that the amount of crude oil being produced is
a function of market power and that this exercise of market power
produces greatly inflates world crude oil prices. For example, the
Middle East with its vast reserves (65% of the world total) and
highly prolific oil wells could have developed reserves to produce
and sell enough oil to satisfy total world demand at under $5 per
barrel and still enjoy substantial government revenues.