" />
Building a world of
resilient communities.

MAIN LIST

 

Peak oil notes - July 15

Prices and production
Oil prices climbed slowly on Monday and Tuesday this week on expectations that the economy was doing better. When the weekly stocks report was released on Wednesday showing that US crude stocks had fallen by 5 million barrels, considerably more than the 1.5 million barrel decrease expected by analysts and the 1.5 million barrel increase reported by the API. The news briefly sent oil prices above $78, the highest it has been in two weeks, but settled to close at $77.04 after the Federal Reserve minutes suggested that maybe the economy was not doing as well as previously estimated.

US crude inventories have fallen by 12 million barrels during the last three weeks on lower imports and higher refinery runs. Gasoline and distillate inventories continue to grow as demand for fuel dropped 4 percent last week. Gasoline consumption over the 4th of July holiday was particularly weak.

Boone Pickens reiterated this week that he expects to see oil at $85-90 a barrel this year and $95-100 in 2011.

The Oil Market Report
The IEA’s monthly report issued earlier this week contains a trove of interesting new information and projections as the Agency attempts to grapple with rates of economic growth, oil depletion, investment, deepwater moratoriums and new regulation, and a host of other factors that impinge on the world’s oil markets. The full report, which will not be made public for another two weeks, is said by those with access to estimate a drop in global oil production of 255,000 b/d in June. This comes on top of a drop in global production of 575,000 b/d in May, no growth in April, and a 220,000 b/d drop in March. February was the last month to show substantial growth.

The Agency is still estimating that 2010 demand will average 86.5 million b/d or an increase of 1.8 million b/d over 2009. In its first projections for 2011, the IEA has consumption rising by another 1.3 million b/d to 87.8 million. Most of the increased consumption naturally will come from Asia as OECD consumption is forecast to drop a bit. Apparently, amidst all this growth in demand and what sort of looks like falling world production, we do not have to worry about higher prices as the Agency assures us that OPEC will continue to have 5.5 to 6 million b/d of spare capacity that could be brought into production to meet any emergency.

The Agency expects that Chinese oil demand will rise just 4.8 percent next year to 9.5 million b/d as compared with this year’s growth of 9.1 percent.

There is obviously a lot that does not add up in this mélange of lower real production, rapid growth in Asia, steady prices, lower and less-productive investment and a variety of serious deepwater production problems. Matters may be coming to some kind of a head over the next 18 months, in alignment with IEA warnings in 2007 of an oil crunch by 2012.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


It's not Rocket Surgery: Choosing an Indoor Mini Wood stove for a Tiny House

This article will focus on one item which can keep you comfortable in cold …

Peak Oil Review - Feb 8

 A weekly roundup of peak oil news, including: -Oil and the global …

California Offshore Oil Fracking Permits Halted While Federal Government Performs Environmental Review

The U.S. federal government will stop approving offshore oil fracking …

Peak Oil Review - a Midweek Update - Feb 4

 A midweek update. Price volatility increased this week with oil …

Renewables Could Outcompete Costly, Risky LNG, Investors Warned

A new industry report warns investors, governments and regulators that …

State of The Transition: Oil Oversupply, Shale Bankruptcies, Gas Leaks, and a Whiff of Securities Fraud

There is bad news everywhere for the oil and gas industry.

Once Unstoppable, Tar Sands Now Battered from All Sides

Is this the beginning of the end for the tar sands juggernaut?