" />
Building a world of
resilient communities.

MAIN LIST

 

Peak oil notes - Aug 12

Supply and demand
After touching a recent high of nearly $83 a barrel in the middle of last week, a steady drop in oil prices was capped by a drop of $2.23, or 2.8 percent, on Wednesday to close at $78.02. A pessimistic outlook from the US Federal Reserve was behind much of the decline which sent the Dow down 265 points and the dollar higher, while investors scrambled for the safety of US government bonds. A statement from the Fed said “the pace of economic recovery is likely to be more modest in the near term than had been anticipated” – Fedspeak for “the situation is going downhill.” Considering that the headlines on Monday were saying that “oil was rising on optimism over US economic recovery,” we certainly are in volatile times.

The weekly US stocks report showed unexpected gains in gasoline and distillates, with crude inventories down 3 million barrels on lower imports. US refineries processing was down 3.1 percentage points last week.

In addition to the decline in US equity markets, analysts made a big fuss over “negative” economic news from China which reported a drop in industrial growth from 13.7 percent in June to “only” 13.4 percent in July – year over year. China’s purchases of crude in July fell to 18.8 million tons or 4.5 million b/d from a record high of 22.1 million in June, and only slightly below the 19.2 million tons that were imported in July 2009. Beijing, however, has been beset by major problems including a massive oil spill at an import terminal and serious flooding over large sections of the country.

Once again, the Kurds have blown up Iraq’s northern export pipeline to Ceyhan, Turkey.

IEA’s monthly Oil Market Report
The IEA is now forecasting that demand for oil will be 86.6 million b/d in 2011 and increase by 1.3 million b/d to 87.9 million in 2012. The agency does warn, however, that if economic recovery is not as strong as currently believed, then demand could fall to 86.3 million b/d in 2010 and 86.8 million b/d next year. The IEA sees global economic activity growing by 4.5 percent this year and 4.3 percent in 2011. The Agency notes, however, “that the global economic recovery may falter from the second half of 2010 to pose a significant downward risk to the forecast."

Global oil supplies are believed to have risen by 850,000 b/d in July to 87.2 million b/d. OPEC production increased by 220,000 b/d on higher output from Nigeria and the UAE. An increase of this size suggests that supplies will be plentiful for the immediate future. As has been the case for many months now, demand from China, India, and the oil exporters will be the key to global prices as demand from OECD countries will be stagnant at best.

Meanwhile, in Washington, the US’s EIA is forecasting that global demand will be 85.8 million b/d in 2010 and 87.3 million in 2011.

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.


'Beyond Petroleum' - Fracking's Collapse Heralds the Arrival of Peak Oil

The Age of Oil is winding down - it has been doing so since 2005.

The Great Oil Game: Resource Crisis in Russia?

Complex structures, such as states and empires, are always prone to collapse …

Changes to Total Global Credit Affects The Oil Price

In this post I present results from an analysis of developments to the …

Peak Oil Review - May 4

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

Energy Crunch: what the UK election debate isn’t telling us

Despite a lack of attention on energy in the UK elections, important changes …

The U.S. Production Decline Has Begun

It is not because of decreased rig count. It is because cash flow at current …

Peak Oil Notes - Apr 30

Oil futures traded quietly on Monday and Tuesday until the weekly stocks …