New data series show more detail for crude oil stocks, storage by region
http://www.eia.gov/todayinenergy/detail.cfm?id=21552
Posted on 06/15/2015 5:35:45 AM PDT by bestintxas
The recent OPEC meeting provides an opportunity to understand the mysteries of the global oil market. As expected, OPEC decided not to cut its oil production. Barring unanticipated developments, prices will drop, says oil analyst Larry Goldstein. Potential oil supply, including drawdowns from bloated inventories, exceeds demand. Goldstein rightly cautions, however, that no one knows where prices will settle.
Oil’s dramatic price changes seem baffling. In mid-2014, crude prices averaged around $100 a barrel; now, they’re gyrating between $50 and $60. Over the same period, U.S. gasoline prices have dipped from more than $3.50 a gallon to around $2.50. With the world economy slowly recovering, why have prices collapsed?
The standard explanation comes in two parts.
First, oil demand is what economists call price inelastic. Slight changes in supply and demand can produce large price swings. People and businesses need fuel. If oil is scarce, they still need fuel and will pay dearly to get it. If oil is plentiful, they don’t need much more fuel and, therefore, require huge price discounts before buying more.
This is what’s happened. Supply and demand have unexpectedly expanded the global surplus, reducing prices.
(Excerpt) Read more at washingtonpost.com ...
Boy was he wrong, Shows why one should never believe predictions by investment bankers with no technical background.
Like all schills, his bigtime support for wind and ocean energy to fuel America, as well as his constant attacks on BP from its Gulf spill, were unmasked to reveal as the reason to diss the oil industry.
Technology proved him wrong, but unfortunately he never lived to see his misjudgement of new technology opening up vast horizons.
Peak oil seems to be market manipulation to cause shortage and rob a bunch of consumers. Market manipulation has changed to keeping prices high in spite of plentiful supply.
Oil stocks are being drawn down, meaning more oil is going out of storage than oil is going in.
That means demand exceeds supply at current prices, not the opposite.
Stocks are not supply and it is a foolish investment advisor that tries to claim it otherwise.
That's "kind of a big deal".
Aren’t some oil fields essentially storage too?
I don’t agree with that character association. The oil flow out of the field is not varied except in extreme or upset conditions. And oil is never sent back into it.
It is until you realize that they have filled their storage capacity. What that really means is that instead of putting the glut of oil on the market and watching the prices crash they tried to store it to defray the prices falling. Now they are full and they don’t have many options.
I guess this means BO and the rats will claim lower oil prices by election time.
The US oil stocks level has been falling now for six weeks after climbing to the peak.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=W
What doesn't exist cannot be caused by oil
New data series show more detail for crude oil stocks, storage by region
http://www.eia.gov/todayinenergy/detail.cfm?id=21552
Because the world economy isn't recovering. It has stagnated, at best.
It is because oil demand, while still growing, grew slightly while supply grew quite a bit.
Please, reread that. It completely conflicts with what you wrote, Durus.
Thackney wrote that more oil is leaving storage than entering. If true, this means, regardless of the fact that production is going up or down or sideways... the "glut" of oil IS ENTERING THE MARKET, so there must be some sort of demand for it.
I just wonder where is the crash you forecast? Haven't we seen it already? Where is the $17/bbl crude oil that we haven't seen since, like, 1999?
Regardless of all that, there will always be soccermoms driving minivans full of kids to gymnastics or dance classes, or yoga or "pilates for kids" or whatever.
There will always be demand for cold beer and Air Conditioning, because people want an easy life watching "Ow, My Balls", or the "Monday Night Rehabilitation".
By 2020, based on crash/recovery cycles previously, I can easily see recovery to $140/bbl.
Then again, we will have probably been nuked by Iran by that point.
Good article up to the Global Warming mention. Sheesh!
“Aren’t some oil fields essentially storage too?”
Yes and no. There are a number of old oil fields which serve in some capacity as storage for the US Strategic Petroleum Reserve. These are mostly just used as storage and not much oil now is pumped into them. The amount is quite considerable at over 700 million barrels, making them in aggregate the largest oil storage in the world, and the amount of oil is bigger than any of the US’s remaining oil fields save a select few. Their key is the ability to drawdown very rapidly these amounts for domestic usage.
Generally, it is infeasible to reinject oil back into oil fields as too much would be lost in the process unless specialized provisions are made such as in the SPR fields.
Natural gas is much more common to be reinjected back into production gas fields to use as storage as there are definite cycles when usage is so great that insufficient supply would otherwise be available for heating and power generation.
Actually, they’re right within the scope of the boundaries they set.
We will run out of oil in year XYZ
(given the current prices and technology).
(given the current prices and technology).
Things have been changing so much that we will always have new technology to get oil. The last barrel may cost $1B but capitalism will provide it if they can find a buyer. New fuels and things will change faster than we can imagine.
Then we won’t get that last barrel.
When oranges start costing too much,
we switch to something else.
Basic Economics: A Citizen’s Guide to the Economy; Sowell
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