Monthly Price

The price of crude oil continued to increase through June with an average price of US$128.34/barrel - US$8.95/barrel (7.5%) more than May and US$61.45/barrel (91.9%) more than the previous year.

The International Energy Agency (IEA) recently reported that oil supplies are expected to grow more slowly than recently anticipated. Spare capacity would fall as demand increased from developing countries coupled with supply problems. The IEA specifically identified declining output from maturing oil fields and cost over-runs at new sites as factors affecting supply.

At the time of this report - latest oil prices stood at US$137.73/barrel.

	JUNE 2008	1 Month Before	12 Months Previously
OPEC Price (US$ / Barrel)	128.34	119.39	66.89

* Provisional

Source: OPEC

Annual Price

As can be seen below, prices for oil averaged between US$20-28 per barrel from 1996 to 2003. However, since that time the price of oil has increased markedly from an average of US$28.10/barrel to US$69.08/barrel in 2007 - an increase of 146%. There have been various reasons for this.

In part, prices have been governed by the actions of OPEC. With an estimated 78% of total oil reserves, OPEC has a substantial effect on world prices. Most recently as world prices have risen, pressure was put on OPEC to increase production. From November 2007 OPEC supplied an extra 500,000barrels/day.

With OPEC including several Middle-East countries, the political climate is also extremely important. Since 2003 the tension between Turkey and Northern Iraq has meant the main line between the two countries has been shut for long periods, affecting production. There has also been tension in the Middle East along with fires and weather closing lines for periods.

The provisional average price for 2008 as at the beginning of July stands at US$105.68/barrel.

	Average Price (US$/Barrel)
1996	20.29
1997	18.68
1998	12.28
1999	17.48
2000	27.60
2001	23.12
2002	24.36
2003	28.10
2004	36.05
2005	50.64
2006	61.08
2007	69.08

Source: OPEC

The new OPEC Reference Basket (ORB), implemented from 16 June 2005, is made up of the following: Saharan Blend (Algeria), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and BCF 17 (Venezuela).

Up to December 2005: Monthly & Yearly averages were based on weekly quotations.

As of January 2006: Monthly & Yearly averages are based on daily quotations.

As of January 2006: The Basket Price is subject to revision.