[url=http://www.fcnp.com/534/peakoil.htm]The Peak Oil Crisis:
Waiting for Winter (link)[/url] By Tom Whipple:
In the fourth quarter, worldwide demand for oil goes up by 2.5 million barrels per day over summer demand to keep the northern latitudes warm during the winter months. Given that we might have an unusually cold winter this year, the demand increase might be conservative.
The Chinese government recently announced their economy is going to grow another nine or ten percent this year. Maybe they have figured out how to grow without increasing their oil consumption. If they expect in keep this up, their oil imports should start increasing The US economy is still bouncing along fairly well with predictions of pretty good growth next year. More oil needed!
Although many of our flooded refineries are getting back into operation, about a million barrels per day of refining capacity has not yet recovered from the hurricanes. Two-thirds of our Gulf oil production is still shutdown and it’s beginning to look as if government predictions that all will be well in the Gulf by Christmas are optimistic. In Iraq , the insurgents continue to blow up oil pipes at a steady pace and it is only a matter of time before they figure out how to shut down production completely. The shipments of refined gasoline to the US from our fellow International Energy Agency members will soon be drawing to a close. The first signs of serious inflation are beginning to stir.
Despite all this bullish-for-oil news however, prices have dropped some 15 percent since the Katrina peak of over $70 dollars. Wall Street oil traders and analysts are starting to tell financial reporters that the hurricane dislocations are over for a while and the good times may roll for a while longer. Indeed earlier this week the Dow flew up 170 points on the idea that our oil problems no longer look as bad as they did a few weeks ago.
Where did all this optimism come from? Is it justified? The root cause, of course, is
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