Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on January 25, 2018

Bookmark and Share

Oil Demand Gushing Again

Consumption

The price of a barrel of Brent crude oil rose to $68.88 a barrel yesterday, one of the highest recent readings since December 2, 2014. That’s a spectacular 147% rebound from the January 20, 2016 low of $27.88.

It’s remarkable because it follows a 76% crash in the price of this commodity from its June 19, 2014 peak (Fig. 7).

The price of oil is highly correlated with the CRB raw industrials spot price index. That makes sense since both oil and other industrial commodity prices are influenced by the global business cycle.

They can diverge from time to time because the supply-demand balance in the oil market includes a geopolitical component that’s absent from other commodity markets.

Just for fun, Debbie and I constructed a global economic indicator that is the average of the CRB index and the price of a barrel of Brent (Fig. 8).

This Global Growth Barometer rebounded in 2016, stalled in early 2017, but has been moving higher again to the highest level since late November 2014.

The rebound in the price of oil is remarkable given that the most recent freefall was attributable to the rapidly rising oil output of US producers (Fig. 9). US production didn’t fall much when oil prices plunged. Now that production is back to as high as it was in 2014. Yet the price of oil has been rising, and US crude oil inventory stocks have been declining (Fig. 10).

 The obvious conclusion is that global oil demand is outpacing supply—yet another confirmation of the strength of the global economic expansion.

NewsMax



29 Comments on "Oil Demand Gushing Again"

  1. Go Speed Racer on Thu, 25th Jan 2018 9:29 pm 

    Starbucks coffee review. Tastes like a
    tire fire extinguished with cat piss.

    https://archives.sfweekly.com/foodie/2012/01/18/tire-fires-and-cat-pee-starbucks-blonde-roast

    Where the Sightglass Blue Boon smelled something like a wispy bit of cotton candy infused with the slightest essence of berry, the Veranda Roast smelled like a tire fire that has been extinguished with a bucket full of cat urine.

  2. Go Speed Racer on Thu, 25th Jan 2018 9:31 pm 

    That’s being pretty hard on Starbucks.
    I don’t think it tastes like a tire fire.
    Just burnt cat piss. And enough cream
    and sugar will hide that cat piss
    taste, but nothing wil cover up a tire fire.

  3. MASTERMIND on Thu, 25th Jan 2018 9:32 pm 

    The End of the Oil Age is Imminent

    Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

    What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.
    https://imgur.com/a/6dEDt

    Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.

    Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.

  4. MASTERMIND on Thu, 25th Jan 2018 10:13 pm 

    “America has had 11 school shootings in the last 23 days, which is more than anywhere else in the world, even Afghanistan or Iraq”

    Thank This Arse!

    https://imgur.com/a/lG3ac

  5. MASTERMIND on Thu, 25th Jan 2018 10:31 pm 

    Some countries might want to consider putting a travel ban on Americans /s

  6. Go Speed Racer on Thu, 25th Jan 2018 11:40 pm 

    I once met that guy. At an NRA convention.

    Well the American school kids have to
    learn their 3 R’s

    Rifles,
    Rugers,
    Reloading!

  7. fmr-paultard on Fri, 26th Jan 2018 12:03 am 

    be a good sport. don’t grab it bro.

  8. MASTERMIND on Fri, 26th Jan 2018 12:17 am 

    Tax overhaul will have a limited effect on U.S. economy, Moody’s says

    More than three-quarters of the $1.1 trillion in individual tax cuts will go to people who earn more than $200,000 a year in taxable income, who constitute only about 5% of all taxpayers

    https://www.marketwatch.com/story/tax-overhaul-will-have-a-limited-effect-on-us-economy-moodys-says-2018-01-25?link=sfmw_tw

    Looks like it won’t be helping Trump country
    https://imgur.com/a/sNGO5

    Oh well deporting a dreamer will make them feel better..

  9. Mad Kat on Fri, 26th Jan 2018 12:46 am 

    The new tax entertainment out of DC will only do what they all have done, move the wealth up the ladder. It never helps the working stiff. The Dreamers will stay. Wait and see.

  10. TheNationalist on Fri, 26th Jan 2018 3:30 am 

    Anybody that thinks helping out 700K “dreaming people” will make a real long term difference to the ‘host’ country or the ‘source’ country is dreaming.
    It reminds me of Cape Towns’ response to their water shortage. Extend and pretend until you can’t anymore. Then you wake up in a 3rd world overpopulated shithole with a water shortage to add to the energy and political crisis. Madness is everywhere although more acknowledge population growth and exponential growth now as a major cause of human suffering even in the South African news.

  11. TheNationalist on Fri, 26th Jan 2018 3:46 am 

    Water and oil have some things in common:
    https://edition.cnn.com/2018/01/24/africa/cape-town-water-crisis-trnd/index.html

  12. Davy on Fri, 26th Jan 2018 4:14 am 

    “Anybody that thinks helping out 700K “dreaming people” will make a real long term difference to the ‘host’ country or the ‘source’ country is dreaming.”

    This is part of a bargain for tougher borders. You can’t get anything done in Washington without a deal.

  13. TheNationalist on Fri, 26th Jan 2018 4:48 am 

    HAHAHA, a faustian bargain that would be at best!
    All I can say is wow, the zionist propaganda directed to the christian west!, so predictable yet still lingering on.

  14. deadly on Fri, 26th Jan 2018 6:07 am 

    Oil is over 70 USD today. Great news. I can stop driving and start walking.

    Not a difficult choice when gas goes to 2.70 USD per gallon.

    Cut back more than fifty percent, the price of oil will fall. There will be an oversupply, storage will increase, the price per barrel will drop.

    Reduce consumption, save money.

    Increase your money supply, reduce consumption, oil price falls.

    Rinse and repeat.

  15. Boat on Fri, 26th Jan 2018 9:14 am 

    Where are the ETP gang who promised dropping demand and lower prices.We were promised systematic collaspe by the oil industry by the end of 2018.

  16. Shortend on Fri, 26th Jan 2018 9:30 am 

    Boat, the financial high priests are to blame…I mean take credit for it.
    The bubble is inflating beyond reason
    This is IT….per Michael Jackson, and we know his that turned out.
    Hope they can fool us all for another 10 years with their tricks….

  17. Davy on Fri, 26th Jan 2018 9:31 am 

    “systematic collapse by oil industry by the end of 2018.”

    try 2022

    This is only 2018. 4 years is a long time away in an unstable world. All this gloating that peak oil is dead may be premature considering the importance of the economy to oil. The economy is not something to take for granted these days.
    This is the same old unimaginative talk from people with narrow minds and status quo habituation. Enjoy yourselves while you can because I imagine you will be pissing your pants soon enough.

  18. Pat on Fri, 26th Jan 2018 10:21 am 

    the phenomenon soon will be prepare for post oil era, people start hoard oil as it will be ever more expensive, difficult, hard to get. Saudi oil minister rubbishes shale as overhyped. But the oil minister comment that saudi-russia ‘partnership will be for decades,generations’ ridiculous. know that saudi are using all methods possible to prolong their ageing giant oil fields which have gone dry, easy oil decades ago. already seeing signs of oil shortages, will accelerate by end of 2018. prepare……

  19. MASTERMIND on Fri, 26th Jan 2018 10:25 am 

    Boat

    I agree I don’t think the hills group got it right. I think there is some truth to their model that there is less energy and economic activity happening which will keep downward pressure on prices..And I have read a peer reviewed science paper last year that argued that point. But I do not think the downward pressure is enough to make the price drop off a cliff like the hills group has predicted. I see oil only going one way from here! UP UP UP until the oil shortages and global economic collapse! The glut is gone…Europhia is always just a temporary condition!

  20. Boat on Fri, 26th Jan 2018 11:06 am 

    MM,

    Just for you my midterm prediction. US oil with Canada, Brazil and others can deliver enough oil to keep up with demand for at least 2 years at $60. If prices go higher other oil plays can and will come into play.

    The OPEC cuts wont last for ever. Iran, Iraq, UAE Russia, Nigeria and Lybia along with the the Saudi have enough capacity to grow production for many years. We just dont know at what price thay will produce more growth at.
    That is not to say geopoliticsl events will not come into play creating short term shortages. The oil there. How much politics and terrorism interupts the flow is anybodys guess.

  21. Dredd on Fri, 26th Jan 2018 11:12 am 

    “Oil Demand Gushing Again”

    Melt water is thereby gushing into you know where (On The More Robust Sea Level Computation Techniques – 8).

  22. MASTERMIND on Fri, 26th Jan 2018 11:43 am 

    Boat

    The OPEC cuts wont last for ever. Iran, Iraq, UAE Russia, Nigeria and Lybia along with the the Saudi have enough capacity to grow production for many years.

    WORLD ECONOMIES IN TROUBLE: Middle East Oil Exports Lower Than 40 Years Ago
    https://srsroccoreport.com/world-economies-in-trouble-middle-east-oil-exports-lower-than-40-years-ago/

    Saudi Arabian oil reserves are overstated by 40% – Wikileaks
    https://www.theguardian.com/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

    Poor, Poor, Boat! Hate to throw cold water on your (Evidence Free) argument!

  23. MASTERMIND on Fri, 26th Jan 2018 11:45 am 

    Boat

    IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Saudi Arabia’s Energy Minister Warns of World Oil Shortages Ahead
    https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790

    Saudi Aramco CEO sees oil supply shortage coming as investments, discoveries drop
    https://www.reuters.com/article/us-aramco-oil/aramco-ceo-sees-oil-supply-shortage-as-investments-discoveries-drop-idUSKBN19V0KR

    UAE warns of world oil shortages ahead by 2020 due to industry spending cuts
    http://www.arabianindustry.com/oil-gas/news/2016/nov/6/more-spending-cuts-as-uae-predicts-oil-shortages-5531344/

  24. Plantagenet on Fri, 26th Jan 2018 11:51 am 

    Peak Oil theory says oil demand will grow, oil price will go up, prices become unsustainable, a recession occurs and the economy and the price of oil collapses.

    Then it will happen again.

    AND here we go again……

    CHEERS!

  25. Boat on Fri, 26th Jan 2018 12:00 pm 

    MM,

    November saw an increase in the Saudi wealth fund. Thats inspite crazy spending. No oil shortage just oil held backvto rape the world/Chinese of US petro dollars. Notice how Russia is doing better also? Colusion dude.

  26. Boat on Fri, 26th Jan 2018 12:02 pm 

    MM.

    If you actually followed oil you would know these things. Your a click a link short on information machine.

  27. Boat on Fri, 26th Jan 2018 12:08 pm 

    Plant,

    Of course thats right. Human organization for the good of us all ain’t happening. Plenty of oil out there but getting my share of the profits is more important. The world in theory could manage the price of commodities, I don’t see that happening soon.

  28. rockman on Fri, 26th Jan 2018 5:55 pm 

    MM – I would agree with your tone in general. BUT: “Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030…” Maybe a 5-7% decline. Or maybe half that. Really impossible to be very accurate: to much non-public data and too much public data to analyze in sufficient detail.

    But more important: while new discoveries have declined significantly over the years there have been and continues to be new discoveries made every year. While does offset reserve decline completely it does to some degree. Again an impossible number to accurately calculate for the same reason given for the difficulty doing the same for field reserve declines.

    Whatever the time frame a decline in existing global oil reserves it will be extended by X years thanks to new discoveries.

  29. Dredd on Sat, 27th Jan 2018 5:19 am 

    “As the GOP tax bill was being written fossil fuel companies gave huge donations to Republicans — and scored big in return”

Leave a Reply

Your email address will not be published. Required fields are marked *