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Energy prices moved higher during 1999. At the end of 1998, prices for crude oil were around $10.00 per barrel. By the end of 1999, prices were approaching $30.00 per barrel. There were two reasons for the price rally. One was that the Organization of Oil Exporting Countries (OPEC) met and agreed on production cutbacks. That, along with increased demand for crude oil, managed to reduce inventories of oil which had pushed prices so low in 1998. While OPEC has had similar agreements in the past which were aimed at having member countries reduce output, the current agreement appears to have more participation. In the past, when oil prices moved higher, OPEC members tended to unilaterally increase production which, in effect, negated the agreement. With the current production cutback it looks like members are holding to their export quotas. A key question for the energy market in the year 2000 is whether OPEC will be able to continue with the current agreement and even extend it further, or whether member compliance will begin to slip allowing more oil onto the market. The U.S. Energy Information Administration reported that U.S. domestic field production of petroleum in August 1999 was 8.17 million barrels per day. This was up 1 percent from the previous month and 2 percent less than a year earlier. In the January-August 1999 period, field production of petroleum averaged 8.11 million barrels per day, some 5 percent less than in the comparable period of 1998, and 6 percent less than the like period of 1997. For all of 1998, field production of petroleum was 8.39 million barrels per day. U.S. field production of petroleum has been trending lower for many years. In 1973, production averaged almost 11 million barrels per day. By 1990, that average had dropped to 8.99 million barrels per day. U.S. production of natural gas plant liquids in August 1999 averaged 1.77 million barrels per day. That was down 6 percent from the previous month, but 3 percent more than a year earlier. In the first eight months of 1999, production averaged 1.77 million barrels per day. That represented a decline of 1 percent from the same period of 1998 and 3 percent less than in the like period of 1997. For all of 1998, natural gas plant liquid production averaged 1.76 million barrels per day. U.S. imports of petroleum products (not including crude oil) in August 1999 were 1.87 million barrels per day. That was a decline of 8 percent from the previous month but about 1 percent more than a year earlier. In the January-August 1999 period, petroleum product imports averaged 1.97 million barrels per day, down 1 percent from the same period in 1998, and some 4 percent less than in the like period of 1997. For all of 1998, imports averaged 2 million barrels per day. U.S. imports of crude oil in August 1999 were 8.79 million barrels per day, down 5 percent from the previous month and 4 percent less than a year earlier. In the January-August 1999 period, U.S. imports of crude oil averaged 8.75 million barrels per day. That was about the same import level as in 1998, but almost 8 percent more than in the comparable period of 1997. U.S. imports of crude oil have been trending higher over time. In 1985, imports averaged 3.20 million barrels per day. For all of 1998, imports averaged 8.71 million barrels per day. U.S. exports of petroleum products (not including crude oil) in August 1999 averaged 876,000 barrels per day. In the January-August 1999 period they averaged 782,000 barrels per day. For all of 1998, exports averaged 835,000 barrels per day. The U.S. exports small amounts of crude oil. In the January-August 1999 period, exports averaged 136,000 barrels per day. For 1998, exports averaged 110,000 barrels per day. Field production of crude oil in Alaska in August 1999 averaged 1 million barrels per day. For the January-August 1999 period, production averaged 1.06 million barrels per day. This was down 10 percent from the same period in 1998, and 18 percent less than the like period in 1997. Production of crude oil in Alaska has been trending lower. In 1988 production peaked at 2.02 million barrels per day. For all of 1998, Alaskan crude oil production averaged 1.18 million barrels per day. Futures Markets Futures and options on light sweet crude oil are traded on the New York Mercantile Exchange (NYMEX). Other energy products traded there include heating oil, unleaded gasoline, propane and natural gas. London’s International Petroleum Exchange (IPE) trades Brent crude oil futures and options. The IPE also trades gasoil, natural gas and fuel oil. The Singapore International Monetary Exchange Ltd. (SIMEX) trades Brent crude oil futures.

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Excerpted from the CRB Commodity Yearbook.