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OPEC collects price data on a "basket" of
crude oils, and uses average prices for these oil streams to develop an OPEC
reference price to monitor world oil market conditions. From January 1, 1987
to June 15, 2005, OPEC calculated an arithmetic average of seven crude oil
streams, including: Algeria's Saharan Blend, Indonesia Minas, Nigeria Bonny
Light, Saudi Arabia Arab Light, Dubai Fateh, Venezuela Tia Juana and Mexico
Isthmus (a non-OPEC oil) to estimate the OPEC basket price.
At its 136th meeting to review oil markets on
June 15, 2005, OPEC decided to change both the composition of the basket,
and the way that it is calculated. Effective June 16, OPEC's reference
basket now consists of eleven crude streams representing the main export
crudes of all member countries, weighted according to production and exports
to the main markets. The crude oil streams in the basket are: Saharan Blend
(Algeria), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra
Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light
(Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and
BCF 17 (Venezuela).
According to OPEC, the API gravity for the
new basket is heavier (32.7º compared to 34.6º). In addition, the sulfur
content of the new basket is more sour (1.77% compared to 1.44%). On June 15
the new basket would have averaged $50.03 barrel, over $2/B less than the
old basket price of $52.26/B.
At its January 30, 2005 meeting, OPEC decided
that market changes had rendered the band unrealistic, and decided to
temporarily suspend the price band mechanism.
Sources: DOE
Weekly Petroleum Status Report as published in the Oil & Gas Journal
Statistics
Additional information is
available from Oil & Gas Journal's electronic information source OGJ
Online.
Updated
05/09/08
Copyright
2000
PetroStrategies, Inc.
All rights reserved
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