"We are sending $400 billion of your dollars a year to oil-producing countries and look at those countries. They're not our friends," McCain said in Kalamazoo
2004 story
NEW YORK - At the rate things are going, the U.S. oil bill could top $250 billion this year
. If it happens, the bill would be nearly twice as high as two years ago. Also, the total bill to the U.S. for imported oil will exceed--even in real terms--that paid in the early 1980s.
Crude oil prices are hovering above the $49 per barrel mark based on fears of further disruptions in Iraq, clashes with terror forces in Saudi Arabia and the impact of hurricanes in the Gulf of Mexico. The $50 barrier is not far off.
But even if prices fall back slightly, the average price for the year will top $39 per barrel. The result will be the largest oil bill for the U.S. ever. The total U.S. bill for all oil will, taking inflation into account, still fall short of the levels of the early 1980s oil-crisis years. But since the U.S. imports much more of its oil than it did then, the bill for oil imports will be at an all-time high, assuming U.S. usage patterns remain more or less unchanged.
During the first eight months of this year, the price of oil has risen from just under $29. If prices stay at current levels--or even if they fall back a bit--the average price for the year will be around $39 per barrel. Last year, the U.S. consumed about 6.2 billion barrels, up 4.2% from a year earlier. At the same time, imports rose by 6.5%.
If the price of oil stays a bit above $48 for the rest of the year, and usage continues to rise, the quarter-trillion oil bill will be a reality. Just over $170 billion of that total will flow overseas.
Big Bill At The Spigot
Year Price ($) Total Oil Consumption (in billions of barrels) Bill For Imported Oil ($bil) Total Oil Bill ($bil)
1981 $38.00 5.10 $74.91 $193.80
1999 17.51 5.76 63.35 100.94
2000 28.26 5.94 107.77 167.98
2001 22.95 6.10 91.31 139.91
2002 24.10 5.95 92.77 143.31
2003 28.50 6.20 116.89 176.57
2004* 39.00 6.46 170.36 252.02
Prices not adjusted for inflation. * Projected. Source: U.S. Energy Information Administration
The total U.S. energy bill is still much less than it was in real terms in 1981 when the price in 2004 dollars was over $79 per barrel. At that time, the U.S. was spending 13% of gross domestic product on energy, according to the U.S. Energy Information Administration. By 2000, despite a surge in oil prices that year, the U.S. was paying just 7.2% of GDP for its energy. The EIA doesn't report figures for the years following 2000. But with oil prices at current levels, energy costs could reach 7.5% of GDP, the highest level since 1992.
One result of the price increase has been that oil stocks like ExxonMobil (nyse: XOM - news - people ), BP (nyse: BP - news - people ), Chevron (nyse: CVX - news - people ), Halliburton (nyse: HAL - news - people ) and Schlumberger (nyse: SLB - news - people ) are all up by at least 25% since a year ago.
All told, Americans will likely spend about $75 billion or 43% more for oil this year than last year and 76% more than in 2002. To put that increase in perspective, $75 billion is equal to the amount Microsoft (nasdaq: MSFT - news - people ) will pay out to shareholders over the next four years, is larger than the budget of any U.S. government department, is about the budget for the state of California and was roughly the same as the Bush Administration's appropriation request for the Iraq war in 2003.
No comments:
Post a Comment