Last Friday the April Brent oil futures appreciated by 0.4% up to $120.7/b on positive European and US news, including lower unemployment in the US and the decision to provide Greece with another substantial loan to help it avoid a default. These days crude oil is the most watched and popular commodity. It accounts for 2% of the global GDP.
That is why it is very important for investors to know the distribution of powers in the international arena of crude oil.
Crude Oil Producers
According to , the total annual global production of crude oil around the world is nearing 4 billion tons. In 2011 all the global oil production reached the record level of 3.98B tons. Over 58% of the volume was extracted by the world’s 10 major oil countries.
Global Oil Production 2011
In 2011 Russia became the world’s leader in terms of crude oil production, thus gaining the 12.8% share of the global market. For comparison sake, Iran, Saudi Arabia, the UAE and Kuwait altogether produce 914M tons a year (or 23% of the total volume) despite the relatively small area.
Most developed economies are dependent on oil supplies from the region.
It is interesting to notice that over 50% of crude oil is exported. Consequently, the world’s major producers are at the same time the world’s major exporters. They account for over70% of the global oil market.
Most Influential Oil Counties
Russia. After becoming the world’s leader in terms of oil production, this year Russia is determined to preserve and consolidate its position. Its main goal is to expand its oil market outlets, mainly due to China and other Asian countries.
Saudi Arabia. Taking into account the current situation in Iran, Saudi Arabia decided to boost its oil production. Despite the fact, no OPEC member can exceed certain export limits set to regulate global oil prices. However, last year Saudi Arabia (being an OPEC member) exceeded the export limits for several times. The authorities invest millions of dollars in order to increase the country’s production capacity. Today’s production volume is the highest in 30 years – some 10M barrels. Judging by Saudi Arabia’s current production capacity, it may well increase the volume up to 12.5M barrels.
USA. The US authorities are also doing their best to boost the country’s oil production capacity and are looking for the ways and means to avoid the threat coming from China because China’s rapid economic growth jeopardizes the US Dollar and its status of the global reserve currency.
China. The country’s economy keeps showing sound growth, which requires more natural resources, including energy carriers. That is why the Chinese authorities are determined to support the development of China’s domestic oil industry.
Iran. On Friday Iran, one of the largest oil exporters in the world, suspended its export of crude oil to the UK and France. However, the Iranian oil used to account only for 3% of France’s import. The oil embargo was imposed on Iran by the EU because of the tension around Iran’s nuclear program.
World’s Largest Oil Consumers
The major purpose of crude oil production is to satisfy the global needs for energy. Only 5% is used to produce electricity. As you know, the “black gold” is mostly used to produce fuels like gasoline and diesel fuel.
There are many factors determining the list of the world’s major oil consumers, including territory, population, level of economic development etc.
The USA is the world’s number 1 in terms of oil consumption. The other 9 standings in the TOP 10 rating of major oil consumers are occupied by Japan, China, Russia, Germany, Brazil, South Korea, Canada, India and France.
The global oil consumption is expected to increase up to 89.9M barrels a day. However, judging by the current situation, it is still unclear whether oil producers will manage to completely satisfy the raising global demand for crude oil.
Crude Oil: Market Outlook
The crude oil futures contract keeps rallying, experts report. The closest major level of resistance is 107,67 - 261% Fibonacci. A trend reversal can be considered only after the price breaks below the MF pivot and sloping channel (as shown below):
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