Oil and Gas Industry Overview

Significant increases in oil prices due to disruptions in supply, often linked to political events or weather.

Problems that decrease the amount of oil available for sale.

Events like wars or embargoes that disrupt oil supply chains and cause price increases.

Organization of Petroleum Exporting Countries. A group of oil-producing nations that coordinate policies.

A contract to buy or sell a commodity (like oil) at a set price on a future date.

Current market prices for oil, indicating the balance of supply and demand.

Severe weather events disrupt oil production and refining, leading to temporary price increases.

Events that can restrict the flow of crude oil and products to the market, leading to temporary or short-lived price increases.

A global benchmark for oil prices, sourced primarily from the European North Sea.

A benchmark oil price from the US, primarily produced in west Texas, and primarily traded in Cushing, Oklahoma.

Canadian oil benchmark, a blend of heavy oil, bitumen and diluents.

Oil prices vary based on oil type, production location, and transportation costs.

Oil that is easier and cheaper to process in refineries.

Oil that is more challenging and expensive to refine.

Some OPEC members temporarily left OPEC to increase production.

Conflicts and attacks on oil infrastructure cause interruptions in oil supply.

OPEC (Organization of the Petroleum Exporting Countries) manages its members' oil production by setting production quotas and influencing global oil prices.

OPEC members don't always perfectly follow production quotas, as each country makes independent decisions.

Factors influencing OPEC's ability to control oil prices include member compliance, consumer response to prices, non-OPEC competition, and efficiency of OPEC producers.

Spare oil production capacity is the amount of oil that can be added to the market quickly in case of disruptions, signifying the world's ability to handle supply shocks.

Political events and severe weather can disrupt oil supplies and cause price volatility due to uncertainty about future availability and demand.

Oil price volatility is common in the short term because supply and demand are often inelastic, meaning they don't quickly adjust to price changes.

Most of the world's oil reserves are located in regions prone to political instability or disruptions, further influencing price fluctuations.