Calculating the changes in the value of WTI crude oil and natural gas in the United States from 2006 to 2008

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This is the result of recent calculations; those involved in economic and technical analysis of oil and natural gas may find it useful. The value changes of WTI crude oil and natural gas from 2006 to 2008 are shown below, based on prices in the U.S. state of Texas:

**Name**, Year, Month 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, Annual Average
WTI Crude Oil, USD/barrel: 2006 – 64.06, 62.65, 61.98, 68.71, 70.85, 70.62, 74.24, 73.67, 65.11, 59.42, 58.60, 62.03, 65.99
Converted to USD/million BTU: 2006 – 11.04, 10.8, 10.69, 11.85, 12.21, 12.18, 12.8, 12.7, 11.23, 11.24, 10.1, 10.69, 11.37

WTI Natural Gas, USD/million BTU: 2006 – 7.56, 7.12, 6.5, 6.998, 5.97, 6.04, 5.99, 6.85, 4.76, 5.69, 6.74, 6.4, 6.2

WTI Crude Oil, USD/barrel: 2007 – 54.54, 58.62, 60.44, 63.47, 63.73, 66.12, 72.12, 73.20, 77.06, 83.36, 93.97, 91.29, 71.49
Converted to USD/million BTU: 2007 – 9.4, 10.1, 10.42, 10.94, 10.99, 11.4, 12.43, 12.62, 13.29, 14.37, 16.2, 15.74, 12.3

WTI Natural Gas, USD/million BTU: 2007 – 6.3, 6.85, 6.56, 7.32, 7.44, 7.19, 5.94, 6, 6.07, 6.64, 6.39, 6.34, 6.6

WTI Crude Oil, USD/barrel: 2008 – 94.50, 93.13, 104.41, 108.92, 122.14, 131.59, 137.62, 119.00, 106.61, 87.93, 60.58, 43.87, 100.85
Converted to USD/million BTU: 2008 – 16.29, 16.06, 18.00, 18.78, 21.40, 22.69, 23.73, 20.52, 18.38, 15.16, 10.44, 7.56, 17.388

WTI Natural Gas, USD/million BTU: 2008 – 7.77, 8.14, 9.17, 9.99, 10.98, 12.33, 10.36, 8.83, 7.68, 6.28, 6.23, 5.42, 9.12

1 barrel of crude oil = 5.8 million BTU (106 Btu).
From the comparative analysis, it can be seen that during 2008, the annual average price of WTI crude oil was 100.85 USD/barrel, which is equivalent to 100.85/5.8 = 17.388 USD/million BTU. During the same period, the price of WTI natural gas was 9.12 USD/million BTU. Therefore, for the same level of energy output, the cost of WTI crude oil is 17.388/9.12 = 1.9 times that of natural gas. In other words, crude oil is 0.9 times more expensive than natural gas. Similarly, in 2007, the crude oil price was 71.49/5.8 = 12.3$/million BTU; 12.3/6.6 = 1.86, meaning the cost of using crude oil was 0.86 times higher than that of using natural gas. In 2006, the price of crude oil was 65.99/5.8 = 11.377$ per million British thermal units; 11.377/6.2 = 1.835. Using crude oil thus costs 0.835 times more than using natural gas. Change analysis: Assume that the future price of crude oil is a (dollars per barrel), and the price of natural gas is b (dollars per million British thermal units). When the values of a and b change, as long as a/b > 5.8, it is cheaper to use natural gas than crude oil. Conclusion: Over the past three years, both crude oil and natural gas prices have been rising. However, as calculated above, for the same calorific value in the same region, the cost of using crude oil is almost always nearly twice as high as that of using natural gas (0.83–0.9 times). The average prices for August to December and for the whole year aren’t listed below, which makes it a bit messy :( You’ll need to check those values yourself: lol. Name, Year, Months 1 2 3 4 5 6 7 8 9 10 11 12, Average price of WTI crude oil, in dollars per barrel: 2006: 64.06 62.65 61.98 68.71 70.85 70.62 74.24 73.67 65.11 59.42 58.60 62.03 65.99; Converted to $/million British thermal units: 2006: 11.04 10.8 10.69 11.85 12.21 12.18 12.8 12.7 11.23 11.24 10.1 10.69 11.37. WTI natural gas, in dollars per million British thermal units: 2006: 7.56 7.12 6.5 6.998 5.97 6.04 5.99 6.85 4.76 5.69 6.74 6.4 6.2. WTI crude oil, in dollars per barrel: 2007: 54.54 58.62 60.44 63.47 63.73 66.12 72.12 73.20 77.06 83.36 93.97 91.29 71.49; Converted to $/million British thermal units: 2007: 9.4 10.1 10.42 10.94 10.99 11.4 12.43 12.62 13.29 14.37 16.2 15.74 12.3. WTI natural gas, in dollars per million British thermal units: 2007: 6.3 6.85 6.56 7.32 7.44 7.19 5.94 6 6.07 6.64 6.39 6.34 6.6. WTI crude oil, in dollars per barrel: 2008: 94.50 93.13 104.41 108.92 122.14 131.59 137.62 119.00 106.61 87.93 60.58 43.87 100.85; Converted to $/million British thermal units: 2008: 16.29 16.06 18.00 18.78 21.40 22.69 23.73 20.52 18.38 15.16 10.44 7.56 17.388. WTI natural gas, in dollars per million British thermal units: 2008: 7.77 8.14 9.17 9.99 10.98 12.33 10.36 8.83 7.68 6.28 6.23 5.42 9.12. Last edited by dqshkjxx on 2009-2-13 09:27.]