Footnotes

October 2010

  1. At any given time, the price of crude oil is determined by the intersection of the demand and supply curves in the oil market (the equilibrium).

  2. For more information on petroleum product pricing, refer to Natural Resources Canada's website on how prices are determined at http://www.nrcan.gc.ca/eneene/.../howcom-eng.php.

  3. "Financialization" refers to the growth in financial investment and its affect on the commodities market. In recent years, the "financialization" of the futures market has been mentioned by some as a phenomenon that has driven oil prices.

  4. International Energy Agency, World Energy Outlook 2008

  5. US Energy Information Administration, website document: Global Oil Consumption.

  6. Statistics Canada, Energy Statistics Handbook, Forth Quarter 2009

  7. Canadian Association of Petroleum Producers, Energy Statistics Handbook

  8. Data source: Statistics Canada, Energy Statistics Handbook, Forth Quarter 2009, Number 57-601-X

  9. Market capitalization value of all the oil and gas companies trading on the Toronto Stock Exchange

  10. Demand and supply curves are affected by the numerous factors set out in this paper or the underlying affect from increased world economic activity. These determinants lead suppliers and purchasers to make decisions about prices and quantities of crude oil. As these decisions are made, the aggregate supply and demand curves shift accordingly. The magnitude of price fluctuations is a function of the frequency or speed at which these factors or events occur and there impact on supply and demand.

  11. US Energy Information Administration, Performance Profiles of Major Energy Producers, Table 12.

  12. Leonardo Maugeri, the Age of Oil, Praeger, Chapter 10, the Second Oil Shock.

  13. The average fuel economy of U.S. light duty vehicles rose from 13 miles per gallon (mpg) in 1975 to 22 mpg in 1987. (U.S. Environmental Protection Agency)

  14. The Glass-Steagall Act (1934), before its repeal in 1999, prohibited deposit taking banks and other financial institutions from investing in high-risk products such as crude oil futures contracts.

  15. The IEA estimates that fossil fuel subsidies amounted to $557 billion in 2008. Iran's subsidy bill, in particular, reached approximately $101billion (the highest of any country that year), equivalent to about on third of the country's budget (IEA Medium-Term Oil and Gas Market Report, June 2010, page. 50).

  16. Geologists estimate that more than 100 billion barrels of oil reserves lie in deep water of 1,000 feet or more, accounting for about 10% of world's remaining recoverable crude oil (Nickel's Daily Oil Bulletin, Spill Backlash Could Lift Drilling Cost, Oil Price, May 7, 2010)

  17. According to Edward Morse, a managing Director at Credit Suisse, a tightening of regulations, could potentially raise the costs of finding and developing a barrel of oil in deepwater by 10% to 15%, or $5 to $10 per barrel.

  18. International Energy Agency, World Energy Outlook 2008, Chapter One, Energy Prices.

  19. In February 2007, OPEC implemented production cuts totalling 1.7 Mb/d that seem to have played a role in the escalation of oil prices in 2007/08.

  20. Kenneth B. Medlock and Amy Myers Jaffe, James A Baker III Institute for Public Policy, Rice University, August 26, 2009, Who is in the Oil Futures Market and how has it Changed?, Chapter 2, Oil futures Market: Who Trades and Why?

  21. The Glass-Steagall Act (1934), before its repeal (1999), prohibited deposit taking banks and other financial institutions from investing in high-risk products such as crude oil futures contracts.

  22. Stephanie Amour, USA Today, 2008 Foreclosure Filings Set Record, February 3, 2009.

  23. Stephanie Amour, USA Today, 2008 Foreclosure Filings Set Record, February 3, 2009.

  24. IEA Oil Market Report, April 13, 2010

  25. Louise Egan, Reuters News Service, Canada's Economy Shrinks 5.4% in the First Quarter, June 1, 2009.

  26. International Monetary Fund, World Economic Outlook, October 2009, Chapter 1, Global Prospects and Policies, Table 1.1.

  27. IEA Oil Market Report, April 13, 2010

  28. International Energy Agency, World Energy Outlook 2009, Chapter 3, Impact of the Financial Crisis on Energy Investment.

  29. Same reference material as footnote number 92.

  30. Data source: Statistics Canada, Energy Statistics Handbook, First Quarter 2009, Number 57-601-X

  31. Government of Alberta, Talk about Oil Sands, September 2009.

  32. International Energy Agency, World Energy Outlook 2009, Chapter 3, Impact of the Financial Crisis on Energy Investment, spotlight: Canadian oil sands is the boom over or taking a breather.

  33. Nickel's Daily Oil Bulletin, Nine Month Well Count down Two-Thirds from Peak Year in 2006, October 19, 2009.

  34. Government of Alberta, News Release, Province announces a Three-Point Incentive Program for the Energy Sector, March 3, 2009.

  35. The "Enron Loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation. Named for Enron Corporation, who lobbied for the changes to the U.S. Commodity Futures Modernization Act.

  36. International Energy Agency, Medium Term Oil Market Report, Policing Speculators, June 2009.

  37. International Monetary Fund, World Economic Update, July 2010.

  38. Bank of Canada, Monetary Policy Report, July 2010

  39. IEA Oil Market Report, April 13, 2010

  40. IEA Oil Market Report, April 13, 2010

  41. International Energy Agency, World Energy Outlook 2009, Chapter 1, Global Energy Trends in the Reference Scenario, Tables 1.3 and 1.4.

  42. International Energy Agency, World Energy Outlook 2009, Chapter 1, Global Energy Trends in the Reference Scenario, Highlights.

  43. International Energy Agency, World Energy Outlook 2009, Chapter 1, Global Energy Trends in the Reference Scenario, Table 1.4.

  44. International Energy Agency, Monthly Oil Market Reports, August 2001 and August 2009, Table 3 Statistics.

  45. Leonardo Maugeri, the Age of Oil, Chapter 14, the Collapse of Oil Price and Industry Megamergers.

  46. International Energy Agency, World Energy Outlook 2009, Chapter 1, Global Trends in the Reference Scenario, Table 1.10.

  47. See definition of non-commercial traders


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