ResiliencePublished on Resilience (http://www.resilience.org)
Peak oil notes - May 15Published by ASPO-USA on 2014-05-15
Original article: http://peak-oil.org/ by Tom Whipple
New York and London futures prices have risen about $2 a barrel this week closing at $102.37 and $110.19 respectively on Wednesday. The major surprise in the weekly stocks report was an 894,000 b/d jump in demand for US oil products last week. US crude inventories increased by 947,000 barrels , gasoline stocks slid by 772,000 barrels and distillates dropped by 1.12 million barrels as the demand for US products increased. It will be a while before we know how much of the increase in demand is being consumed domestically and how much is being exported.
Stockpiles at Cushing, Okla. fell for the 14th time in 15 weeks, by 592,000 barrels this time. The decline leaves the Cushing inventory at 23.4 million barrels, which is getting close to the minimum operating level of 20 million barrels.
The EIA also reported that US oil production was up by another 78,000 b/d last week to 8.4 million b/d; however, some believe recent EIA production estimates may be on the optimistic side. North Dakota released its production data for March 2014 on Wednesday showing that daily production in an admittedly weather impacted month was still at the level of last November. This means that production from the Bakken shale formation did not grow significantly during the four winter months and is likely to have a smaller growth rate in 2014 than in recent years.
US natural gas futures took a small bounce on Wednesday to close at $4.39 per million after falling by some 45 cents per million in the last week. With the spring weather unlikely to produce any unusual spike in demand, traders are still trying to figure out if our natural gas stocks, which are at about 50 percent of normal, can be replenished in time for next winter. We are still seeing touches of aberrant weather with a rare May snowstorm blanketing parts of Wyoming and Colorado this week. The climatologists are continuing to talk about improving chances we will have a stronger El Nino starting in June which could bring higher temperatures to the US this summer, but also reduce the chances of severe hurricanes next fall.
The Secretary of Energy said that the administration is considering relaxing federal law banning crude exports. If this occurs, it would mark a major shift in US energy policy and likely lead to higher energy costs in the US.
Libya’s El Feel oil field partially opened on Wednesday boosting oil production by about 35,000 b/d to 250,000 b/d. The much larger El Sharara oilfield with a capacity of 340,000 b/d remains closed but is expected to open soon. Both of these oilfields are in the western part of the country. Washington is becoming increasingly concerned about the deteriorating security situation in Libya and has positioned Marines on Sicily where they would be able to intervene quickly to protect US diplomats in the event of disturbances.
The situation in Iraq is about the same with the requisite number of bombings taking place this week. The fighting in Anbar province which sits astride roads to Jordan, Lebanon, and Syria has disrupted shipping in the region sending prices of imported goods higher in Iraq, and cutting off Jordan from 12,000 b/d of Iraqi oil. Building’ construction is Baghdad is suffering as gypsum and cement come largely from factories in Fallujah. Despite increased oil earnings, the country’s economy is slowly falling apart.
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