Black Gold As The World's Economy Indicator

By the way no one country-importer of oil in 2009 complained about the delivery of primary product shortage. OPEC (Organization of Petroleum-Exporting Countries) had been producing oil over prescribed quota during this period. Cartel´s representatives repeated constantly that market is supplied well and it is not their fault that the price for petroleum is high. Oil market crash was expected. But fall down to 37 US Dollars for barrel - unexpected. Producers and users of oil supposed that 60-70 US Dollars for barrel is acceptable market price. Price 90-100 US Dollars for barrel seemed high, but though acceptable. Producers could not imagine price 37 Us Dollars for barrel even in the most frightening nightmares, and users - in the sweetest dreams.

Economy of the USA and US Dollar rate´s influence on the petroleum price
Publications of crude oil reserves in the USA and China as the main petroleum products users have strongest influence on the current short-term oil price. Oil reserves reduction in the USA and China shows the going these countries´ industry out of recession period and general recover of economies of these counties and the rest of the world. Reports of Electronic Industry Association (EIA) USA do not make oil workers happy announcing about considerable petroleum reserves.
One more factor that influences on oil quotations increase is dependence of the world commodities market from the situations on the currency exchange markets. Petroleum as gold will go up against the background of US Dollar´s descent against Euro and other major world currencies.

Oil extraction volume
During the last ten years oil demand has been rising with the average annual speed 1, 6 %. It is preferable to talk about oil extraction level decrease as little as possible. Though there is a point to think about. During the last years oil extraction has decreasing in the USA, Mexico, Norway and Great Britain. These countries have passed the peak of the oil extraction and decrease tendency will intensify every year. Meanwhile 17 % of world oil extraction falls to share of them (by information of BP World Energy Outlook 2008). The most dangerous situation is in Norway and Mexico where in 2007 oil extraction decreased in 7, 7 % and 5.5 %. In 2009 Russia will join these countries, which global oil production part is 12.6%. Now geological survey is frozen in Eastern Siberia. Development profitability and future operation of new oil extraction centers is close to zero at the moment. This situation will exist till the price of barrel becomes 60-70 US dollars.

So next year five major oil production companies will decrease primary materials delivery. If oil extraction of Russia, the USA, Mexico, Norway and Great Britain decreases in 1 % and OPEC reduces as promised in 12 % (or even 10 %), then global oil production level will reduce in 4,5 - 5 % (on conditions that other countries keep oil extraction at the same level).

This oil production decrease can be compared with so-called crisis "Oil Embargo" in 1973 when some Arabic countries members of OPEC decided not to supply oil to the countries which support Israel in "October War". Remind you that global oil production decreased in 4-5 % and price for barrel rose from 3 US Dollars to 9 US Dollars. However difference in reduction of oil production that time and now is dictated by completely different factors. Oil consumption in 1973 was rising, now it is decreasing. Reduction in 1973 was provoked by military and political crisis, now it is provoked by absolutely logical economical reasons. That is why waiting of oil price increase is pointless. It is pointless to remember "Oil Embargo" in 1978 when because of "Persian news" oil production was decreased though unlike 1973 that decrease fall on industrial boom in the USA. Then rising oil price went up from 40 USD to 11 USD.

Speed of supply fall in present crisis conditions can be higher than speed of demand fall which can resist because of developing markets. Moreover EIA has already announced that in 2011 world risks to face energetic catastrophe because of insufficient oil supply. Logic of EIA is simple. For oil production increase it is necessary to invest 360 billion Dollars. In crisis and low oil prices conditions companies will reduce investments which can lead to the abrupt fall of oil production level. Oil demand will be reinstated but not the extraction level because companies would not invest in appropriate time. This will lead to excess the demand over the supply. Moreover it should be taken into consideration that the oil price is not objective from the cost value point of view. Cheap oil era passed and cost value is rising year to year. Average cost of production can be from 4 to 7 US Dollars for barrel in traditional regions of extraction, for instance, in Russia. Cost of bathypelagic oil production can be from 20-40 US Dollars per barrel. Add to the prime cost transportation cost and other extra costs and we receive that the price that is acceptable for producers (and price which allows to intensify production in future) is 60 US Dollars for barrel. Low prices prejudice new projects of oil production in regions difficult to access.

Oil future
In 2009 oil prices can return to rising tendency which was in 1998. By returning to rising tendency means quotations moving in the range 40-80 US Dollars per barrel. In the first half of the year market will not get rid of many speculators´ influence, that is why it can be expected that oil prices can stay in diapason 40-50 US Dollars per barrel. Though temporary price fall to 20-25 US Dollars for barrel is probable. At the second half of 2009 market will begin to feel oil deliver decrease. World economy can start to adapt after the autumn shock of 2008. Recognition of the fact that many assets were resold in panic will come. Oil supply reduce will be felt more powerful in the second art of the year. It can move oil prices to higher diapason 50-70 US Dollars. According to these facts forecast of the average oil price in 2009 will be approximately 60 US Dollars. Guide oil price of end of the year is 65 US Dollars per barrel. However it is just forecasts reality can be another. It is unknown how successful "Obama´s plan" will be and how stable US Dollar will be and if new round of recession overwhelm the world economy. However parliaments of many oil-producing countries are reconsidering the budget and budgetary oil price with amendment on pessimistic forecast.