FYI: The price of a barrel of West Texas Intermediate (WTI) crude oil has fallen from more than $100 a barrel in late June to less than $60 a barrel. While the broad outline of the reason for the drop is simple — supply is outstripping demand — the devil, as always, is in the details.
Demand is dropping largely because global economic growth has slowed. The emerging economies of Brazil, Russia, India and China have faltered or gone into reverse. The developed economies of Europe are teetering on the edge of another recession, and U.S. economic growth, though better, is erratic. Add to this lower demand for transportation fuel as automakers build more fuel-efficient vehicles.
On the supply side, North American shale oil has dramatically changed the picture. U.S. crude oil production is at a 40-year high and shows little sign of slowing down. OPEC has said it will not cut production as it fights to keep market share, and Russia needs to produce and sell as much oil as it can to keep its economy from collapsing. Thus, no cut in supply, at least not yet.
That potential supply is filled by global proved oil reserves that totaled 1.635 trillion barrels in January 2013. At the current global consumption rate of about 90 million barrels a day, those global reserves will last about 50 years.
Of the top 10 countries holding portions of those reserves, only Canada does not have a national oil company, and the nine that do control 1.23 trillion of the world’s total proved reserves. That is about 75% of the world’s proved reserves that are off-limits to private oil companies.
Regards,
Ted
http://247wallst.com/energy-business/2014/12/15/the-worlds-top-10-oil-companies/print/
