" />
Building a world of
resilient communities.

MAIN LIST

 

Peak oil notes - Dec 16

Developments this week
So far this, US oil futures have traded around $88 a barrel. The only interesting development came when the stocks report showed US crude inventories falling by nearly 10 million barrels and total commercial petroleum inventories falling by 15.6 million barrels last week. Analysts were expecting a decline of circa 2.5 million barrels and the API reported its survey showed crude inventories falling by only 1.4 million barrels.

After the report was issued oil prices jumped a bit. They fell again after analysts attributed most of the decline in stockpiles to Gulf Coast refineries deliberately delaying imports to avoid paying local taxes that are assessed on inventories at year’s end. Analysts expect stocks in this region to rebound after the New Year begins.

While NY crude closed on Wednesday at $88.62, up 34 cents, London crude climbed 99 cents on Wednesday to close at $92.20 – the highest since October 2008. The global oil situation is still tight with China continuing to overcome its diesel shortage. As the new recent high for Brent crude shows, there may be more to the falling inventory situation than simple tax avoidance.

Abnormally cold weather in the US, Europe and China continues to be a factor in holding up oil prices. At mid-week, Beijing was still reporting snow and record lows across much of the country.

Goldman Sachs has issued a new report on the prospects for oil in 2011. The firm expects that global demand for oil will grow by 2 million b/d next year, well above the increase the IEA is forecasting. Goldman’s says prices will climb to “more than $100 a barrel” by the second half of 2001 as OPEC starts running through its spare capacity in an effort to meet the increased demand and keep prices stable.

On Tuesday the US Federal Reserve issued a rather pessimistic report on prospects for the US economy. This stands in contrast to increasingly optimistic forecasts from Wall Street economists for the coming year.

China
On Monday, a new report showed that Chinese refineries ran at record rates suggesting that increases in Chinese demand may continue for a while longer. The China National Petroleum Corp. said on Tuesday that it is still trying to boost supplies of diesel fuel as the domestic situation remains “tight.” A new report says that China plans to import 233 million more tons of coal than it exports next year. This would be up from the 143 million net tons that it is expected to import in 2010. Beijing in conjunction with India may be in the market for 337 million tons of coal in 2011. Such an increase in demand will obviously drive up global prices as more coal is diverted to Asia.

The markets seem satisfied that at least for now Beijing will attempt to control inflation by increasing banks’ reserve requirements rather than by raising interest rates. The latter is seen as more damaging to continued rapid growth in China.

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.


Higher-risk 'Shallow Fracking' More Common than Suspected: Study

The fracking of oil and gas less than a mile from aquifers or the Earth's …

Shale Gas Reality Check

Recently, the EIA released its Annual Energy Outlook 2015 and so we asked …

The Community Energy Revolution

Impact investing is investing to achieve a return in something you also …

Peak Oil Review - July 27

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

Energy Crunch - Green taxes: love or hate?

Green taxes have been under attack on all fronts lately.

Nine Reasons Why Low Oil Prices May “Morph” Into Something Much Worse

Why are commodity prices, including oil prices, lagging? Ultimately, the …

Peak Oil Review - July 23

As prices continue to fall, concerns are increasing on Wall Street as to the …