Building a world of
resilient communities.

MAIN LIST

 

Peak oil notes - July 10

Stockpiles & Prices

After reaching an all time high of nearly $146 just before the 4th of July holiday, oil prices dropped by $10 a barrel on Monday and Tuesday. Profit taking combined with conciliatory talk from Iran, slowing world demand, and a strengthening dollar motivated the decline. Even a bullish US stocks report on Wednesday failed to move the markets higher.

The Wednesday report showed US crude imports dropping again so that crude inventories declined by 5.9 million barrels and are now below the lower boundary for the range at this time of year. Gasoline and distillate inventories both increased at bit.

Declining demand for petroleum in the US continues as a trend to watch. The EIA says total consumption of petroleum products is down by 1.8 percent over last year. Gasoline consumption is down by 2.1 percent, jet fuel by 2.2 percent but distillate consumption is up by 1.3 percent. Some believe that increased US exports of diesel, which have doubled in the last year, is causing the increase in distillate demand rather than domestic consumption. The EIA does not directly track US petroleum exports and only receives export data from the Department of Commerce weeks after the fact.

Oil closed at $136.05 a barrel on Wednesday down six percent from the record close of $145.29 last Thursday. Gasoline and diesel prices climbed to new records in the US this week with gasoline reaching $4.11 a gallon. Diesel prices increased by 8.2 cents a gallon last week to $4.72.

The continuing drop in US crude inventories is causing concern. Stocks are now at the lowest point for July in the last five years. Once again the Gulf Coast crude inventory declined, this time by 2.1 million barrels. As Mexican and Venezuelan exports continue to sag, this is understandable. West Coast crude stocks declined by eight percent which some believe is due to increasing competition from Asia for crude cargoes.

China facing power shortages

This week there has been a steady stream of reports concerning actual or incipient electricity shortages in China. Hydro power production is suffering from droughts, and coal shortages are widespread. China’s GDP has been growing about 10 percent a year and electricity production at15 percent, but in recent months electricity production has been slipping. The Chinese have already closed one of their largest aluminum smelters in order to direct power to agricultural production.

Chinese crude imports in June were up by 3.3 percent year on year in June to 14.5 million tons but were still well below the 17.3 million tons imported in March. During the last major electricity shortage four years ago, Beijing turned to imported diesel to fuel backup generators at many industrial facilities. Should the power shortages continue, it is likely that China will increase oil imports further straining the world market.

Editorial Notes: Original has a graph of crude oil stocks. To see it (and get email versions of Tom's freee newsletters), sign up at ASPO-USA: http://www.aspo-usa.com/ -BA

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Make connections via our GROUPS page.
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

Tags:  

The Ukraine conflict, peak cheap gas and the MH17 tragedy

The number of countries with fossil fuel conflicts and wars is increasing. …

Peak oil notes - July 31

A mid-week update. Crude prices continued to fall this week as markets …

New Russia Sanctions: Washington, Delusional About US Energy Capacity, Lashes Out

The effect of the sanctions will be to speed the Russian decline, forcing up …

Shales vs. solar: An investment perspective

But perhaps the real proof of a new energy paradigm shift lies in the fact …

Peak Oil Review - July 28

A weekly review including Oil and the Global Economy, The Middle East & …

The Changing Face of World Oil Markets

My conclusion is that hundred-dollar oil is here to stay.

IEA Oil Market Forecast: Optimistic Assumptions And An Economy Unable To Grow Out Of Its Problems

The International Energy Authority does does its best to paint a rosy …