The average levelof oil stocks around the world was up in relation to 2007, generating a surplus in the product supply-demand balance for 2008

Shifting world scenario affects

Abrupt changes in the world economy during 2008 had a direct impact on commodity prices, significantly affecting the oil market. The price of a barrel of Brent oil varied from a peak of US $ 145.66 to a low of US $ 34.04, mainly due to demand oscillations during the course of the year. The average Brent oil price was US $ 96.99 a barrel, fully 33.7% above the average figure for 2007.

Plataforma de produção P-52
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The increased demand from Asian countries for light oils, in the first half of 2008, compared to that of the same period of 2007, was the principal driving force behind the sharp rise in prices during that period. On the other hand, the immediate reduction in demand from OECD (Organization for Economic Cooperation and Development) countries in the second half of the year, allied with the pessimistic outlook for future demand, led to a similarly sharp drop in prices during the last two quarters. Not even the relative stability of demand from non-OECD countries, particularly China and India, was sufficient to hold the prices within the US$ 80 to US$ 100 a barrel range that had prevailed during the last quarter of 2007 and the first quarter of 2008.

On the supply side, the decline in non-OPEC production, led by Russia, Mexico and the United Kingdom, was partially offset by higher volumes from the OPEC countries, during the second and third quarters, when Saudi Arabia responded to requests from the International Energy Agency and raised its production by around 300 thousand bpd. Nevertheless, the deteriorating macroeconomic situation around the world, as from the middle of the year, especially in the United States and Europe, led to falling demand for commodities and caused OPEC to cut back on its production quotas by 1.5 million bpd, as from November. Under the circumstances, the average level of international oil stocks rose, in comparison with the 2007 figure, generating a surplus in the product supply-demand balance for 2008.

Geopolitical factors, such as the problems caused by guerrilla action in Nigeria, tension on the Turkey- Iraq border, and the Russian incursion into Georgia, as well as the nuclear issue in Iran, among others, appear to have played a secondary role, in terms of their influence on the oil market during 2008, when compared to the impact of the economic scenario.