Kutubu crude oil prices jumped during
first half

By FRANK ASAELI
THE Department of Petroleum and Energy has reported that Papua New Guinea light crude oil prices increased between 27% and 40% during the first six months of the year.
According to the January-June oil prices and exports report, the prices started the year above US$50 (K136) a barrel last January and generally continued an upward trend to June and ended above US$65 (K176) per barrel last June.
The figures strongly remained around this range last July and were forecast to remain well above US$65 a barrel for the rest of the year.
However, these average prices were lower than the corresponding period of last year, with averages in the range of US$60 (K163) per barrel to US$70 (K190) per barrel.
The large price decline began last December and continued through mid of last January due to paper oil spectacular.
Price jumped up in the last week of January on average by US$1.67 a barrel and continued to surge mainly due to colder winter in US.
Also declining inventories, good demand growth (in China and South Korea), geopolitical events especially the Iran nuclear station situation, disruptions during the contentious Nigerian presidential elections, and natural disasters were key factors to the upward trend and high maintenance of prices in the first six months.
The Asian petroleum price index (APPI) quoted crude prices for Kutubu last January on average at US$56.45 (K170) and ended on average at US$75.90 (K228.61) last June, the six months average was US$68.58 (K206.57).
Kutubu prices almost remained unchanged on average.
Crude oil produced and exported for the six months was more than 7.44 million barrels, which is about 13.52% lower than the corresponding six months period from January 2006 to June 2006 figure of 8.61 million barrels.
The decrease in production reflects the natural decline in production.
With the average Kutubu price of US$67.47, the gross value of PNG crude oil exports the first six months was US$502, 276, 520.21 and with a six months ANZ Bank (PNG) average Kina to US Dollar exchange rate of 0.3398 the equivalent value in Kina is approximately K1.478 billion.