The EIA published its weekly oil report today, and the story remains headlined by lower demand restoring inventory levels. Gasoline consumption was 5.5% lower than last week, helping a recovered refinery system and high imports increase its inventory back toward normal levels. Distillates/diesel inventories fell another half a million barrels to the bottom of the average range for this time of year. But 12% lower demand (more…)
Posts Tagged ‘Hurricane Ike’
Recession’s low demand drives oil prices further down
Wednesday, October 8th, 2008Alarming Trend of Lower Oil Production Continues
Tuesday, October 7th, 2008Ever since 2004, the non-OPEC world has struggled to increase its oil production from a plateau around 50 million barrels per day. Today’s EIA Short-Term Energy Outlook (STEO) now projects that 2008 non-OPEC production will actually decrease by more than 200,000 barrels per day. As I have been stressing in recent blogs, the EIA has been constantly lowering its non-OPEC production predictions throughout the year. As recently as February, they thought non-OPEC producers would supply 900,000 barrels per day more in 2008. Their current prediction couldn’t be too far off now that (more…)
Lower Oil Demand Balancing Inventories
Wednesday, October 1st, 2008I have to admit, today’s oil report surprised me. While crude oil production remains battered by the recent hurricanes, causing 2008 production to fall further below last year’s level, huge demand reductions continued to pick up the slack. While some of the reduction may have been temporary due to the gasoline shortage in the Southeast, much of it seems to be a robust trend. Gasoline and distillates consumption has dropped to levels not seen since (more…)
Debate This: Solar, Wind & Efficiency to replace oil imports from Mexico & Venezuela
Friday, September 26th, 2008Over the next seven years, two of our top sources of oil imports may cut us off. Just last year, Mexico and Venezuela sold us 2.9 million barrels per day to fuel our cars and heat our homes, over 20% of our import demand. But Mexico’s oil production is falling more than 5% per year while their domestic consumption rises. Thus, most analysts predict Mexican oil exports to be nonexistent by ~2015. And Venezuela is signing deals with China to send more of its exports there over the next few years even though their production is currently stagnating.
As the Southeast experiences the crippling effects of fuel shortages, planning to replace this oil over the next seven years is critical if we are to (more…)
Gasoline shortages show economic fragility of oil dependence
Thursday, September 25th, 2008My native state of North Carolina (along with a few others in the Southeast) continues to suffer from gasoline shortages, especially in the Charlotte area and further West. It looks like shortages will last at least another week before refineries have recovered enough to remedy the situation. Some schools are even closing due to lack of fuel — a serious reminder that oil supply stagnation in the years ahead is a reality we don’t want to hit without (more…)
Gasoline Supplies at Record Low, Ike Maintains Grip on Oil Market
Wednesday, September 24th, 2008The EIA weekly oil report just came out. And as I’ve been writing for days, it wasn’t pretty. Gasoline inventories fell to their lowest level since the 1960s — when gasoline demand was around half of what it is today. This thin margin of supply over demand has already resulted in 10+ days of shortages in (more…)
US natural gas supplies build, solar industry revving up
Thursday, September 18th, 2008The EIA reported another build in storage today, though the supply increase was 24% lower than the five-year average for this week due to Hurricanes Gustav and Ike. We will have at least one more week of slow growth reported next Thursday from Ike production, leaving many analysts to predict that this year’s winter storage peak will be closer to average than last year’s record. Since natural gas consumption has increased these last few years, this development is somewhat bullish — especially given the weak dollar. But natural gas supplies remain robust for the winter unless (more…)
Gasoline supplies lowest on record, but inventories saved by lower demand
Wednesday, September 17th, 2008The EIA reported today that the whole fuel inventory complex is down significantly from last year and below the five-year average. Gasoline supplies are at their lowest level since detailed records began in 1981. In normal times, such a report would result in much higher prices. But these aren’t normal times as reduced demand continues to be the savior of 2008 for lowering prices and keeping our inventories above minimum operating levels.
However, next week’s report will test the ability of lower demand to make up for even lower supplies. Crude supplies will most likely fall below 290 Mb with gasoline supplies falling the farthest, potentially below (more…)
Hurricane Ike recovery slow, flailing economy drags oil further
Tuesday, September 16th, 2008While Hurricane Ike was no Katrina, it’s effects on Gulf of Mexico oil production hold strong three and a half days after landfall. The Mineral Management Services report that less than 3% of oil production has resumed in the Gulf as of 11:30am CST today. This means that Hurricanes Gustav and Ike have exceeded EIA projections of 14.5 million barrels in Hurricane-induced outages throughout 2008, with the possibility of another storm hitting the region before the season is over. An oil market report will come out tomorrow to share (more…)
US Financial Collapse Leads to Oil Price Plunge
Monday, September 15th, 2008Evidence of a serious economic downturn in the largest consumer of oil has sent oil’s price down further. The US is facing one of the worst financial meltdowns since the Great Depression as two of Wall Street’s banks collapsed today, Merrill Lynch (which was bought by Bank of America) and Lehman Brothers (which filed for bankruptcy). Our oil consumption may fall to levels not seen since (more…)