Economic Report 2013 - page 11

ECONOMIC REPORT 2013 11
Oil Markets
Oil prices in 2012 were characterised by a
short-term peak followed by an even shorter
trough during the first half of the year and
steadiness for the second half of the year.
Overall, although world demand for oil edged
upwards, with demand in OECD1 countries
falling and non-OECD rising, there has been
notable consistency during the past two
years in the price of Brent crude oil, the main
‘marker’ price in the Atlantic basin (see figure 1).
The average price was $112 per barrel in
2012 (versus $111 in 2011), to the nearest
whole numbers. However, if measured with
greater precision, the difference between the
two was even smaller: less than 50 cents per
barrel. The maximum was $128 per barrel
in March and the minimum $89 in June.
Since the beginning of 2013, the price has fallen
by about ten per cent and, in recent months,
has largely oscillated in the range of $100 to
$105 per barrel, but with a slight increase
evident at the time of writing, in June and July,
owing to renewed political turmoil in Egypt.
Worth noting is the comparison of oil priced
in dollars and pounds sterling which obviously
reflects movements in exchange rates
(see figure 2). In particular, the price of Brent
in sterling has been largely constant over most
of the past two years, apart from the brief
excursions in March and June 2012 mentioned
above, at a time when worldwide demand has
been creeping steadily upwards (to an average
of 90 million barrels per day (bpd) in 2012.
For comparison, it was 80 million bpd in 2003).
3. Oil and Gas Markets
Figure 1: Brent Oil Price, January 2008 to June 2013
(in money of the day)
Figure 2: Annual Brent Price since 1965,
£/barrel versus $/barrel (inflation adjusted)
1 The mission of the Organisation for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well-being of
people around the world. Thirty-four countries are members of the organisation. More information can be found at: http://www.oecd.org
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Jan 08Mar 08May 08Jul 08Sep 08Nov 08Jan 09Mar 09May 09Jul 09Sep 09Nov 09Jan 10Mar 10May 10Jul 10Sep 10Nov 10Jan 11Mar 11May 11Jul 11Sep 11Nov 11Jan 12Mar 12May 12Jul 12Sep 12Nov 12Jan 13Mar 13May 13
Brent Oil Price ($/bbl)
Source:EIA
Brent Oil Price ($/bbl)
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1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Oil Price Comparison (2012 Prices)
Brent Price ($/bbl)
Brent Price (£/bbl)
Source:EIA,BankofEngland
Source: EIA
Source: EIA, Bank Of England