October oil demand down 4.07 pct from year ago: EIA Mon Dec 29, 2008 11:25am EST   WASHINGTON (Reuters) - U.S. oil demand in October was 598,000 barrels per day more than previously estimated and down 833,000 bpd from a year earlier, the Energy Information Administration said on Monday. U.S. oil demand in October was revised up by 3.14 percent from the EIA’s early estimate of 19.045 million bpd to the agency’s final demand number of 19.643 million bpd, and was 4.07 percent less than demand of 20.476 million …

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  Revised July oil demand lowest in 11 years: EIA Fri Oct 3, 2008 1:19pm EDT By Tom Doggett WASHINGTON (Reuters) - U.S. oil demand in July fell to the lowest level for the month in 11 years, with consumption 736,000 barrels per day less than previously estimated and down 1.335 million bpd from a year earlier, according to the U.S. Energy Information Administration. Crude oil and gasoline prices hit record highs in July, and U.S. motorists reduced driving for the ninth month in a …

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Hugo Chavez would like nothing more than to sell all his oil to some customer other than the U.S.  That way he both gets his revenue and hurts his energy.  He seems to have found his customer - China.  As the report below describes, Venezuela, which has ramped up its China oil sales to 250 kb/d so far, is planning on 500 kb/d in 2009 and 1 mb/d by 2012.  Since the Venezuela currently is the fourth largest supplier to the U.S. at 1.1 mb/d and since exports …

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An under-appreciated part of today’s oil supply dynamics is increased incentives for investments in Enhanced Oil Recovery techniques, as I discussed as part of a recent post predicting that oil prices may trade in a range of $80 - $100 for some time.  Posted below is a report detailing how new technologies are being applied to U.S. “stripper” wells, of which an estimated 400,000 produce nearly 1 mb/d.   Small improvements in effectiveness and cost reduction are being implemented in this business because of new high oil prices and …

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I recently had lunch with a top U.S  Department of Energy executive.  He’s “in charge” of half the world - mostly the half that exports oil.  This very charming individual was unable to define what the present U.S. energy policy is.   I suppose he understands, but cannot admit publicly, that our policy under the present nitwit administration is to give oil companies and oil supply companies, e.g. Halliburton, everything they want - tax breaks, drilling rights, lack of oversight - and to give the 44 farm-state senators a mandate …

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The following Globe and Mail report highlights global oil demand reduction including the well known U.S. first half reduction of roughly 4%.  Note that this drop in oil use came while the price was rising but for most of the period had not reached anywhere close to the  $147 level it eventually attained.   Note also that the 800kb/d U.S. drop is an average for the 6-month period - clearly the drop was increasing and so the running rate now could be a good deal more.  I heard a new …

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I understand that oil’s 20+% retracement from its high is not unprecedented; such a pullback often occurs in a bull market.  I also know that currently available values in oil and gas stocks seem excellent and that pullbacks in bull markets are the right time to accumulate bargains. Nonetheless, instead of buying I’ve been increasingly liquidating oil and oil service stocks.  I’ve sold my options on oil futures.  I’ve increased the EIS portfolio’s cash position for one reason.  This pullback may be over quickly but if it isn’t we could …

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The following report from Asia Times Online points to another example of strategic trade by China.  “Looking to fill the vacuum created when the Russians returned home from the five former Soviet Central Asian republics of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan, and the roubles dried up, China is now making moves to become the new Central Asian superpower.”

China’s interest in these poor Muslim countries is primarily their fossil fuel resources.  Once again we see China wrapping up a supply of oil before it can hit the …

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Someone recently said, “Oil shale is the energy source of the future and it always will be.”   There is huge opposition to authorizing shale development among locals in the Western states that are effected.  And so far there is no proven technology that is economical.  Moreover, if the anticipated oil shortage will be most severe in the 2011 - 2020 period, it does not appear from the report posted below that oil shale could possibly be relevant during that time frame.  Here it is:
Squeezing Oil From a Stone
Energy …

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Jeff Rubin, the Wall Street oil analyst who is closest to getting the reality of oil in my opinion, published this piece recently.   He predicts an average oil price of $150 in 2009 and $200 in 2010.  He also says 10 million Americans, mostly poor Americans, will give up owning a car by 2012.  I believe that would be called “demand destruction.”

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The Financial Times provides the following interesting insight into how big complex oil projects are being delayed.   Champions of Thunder Horse have little to cheer By Sheila McNulty Published: July 4 2008 20:42 | Last updated: July 4 2008 20:42 When BP produced the first oil from Thunder Horse, its flagship project in the Gulf of Mexico, the company threw a barbecue. The Thunder Horse platform was supposed to begin producing in January 2005, but was delayed three years by a string of engineering problems. However, in spite …

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J. Peter Lynch, author of the essay posted below, is not the famous former manager of Fidelity’s Magellan Fund named Peter S. Lynch.  Nonetheless he has addressed an important topic, the full cost of our use of fossil fuels. 

I find the most seriously compelling indirect cost of oil is the national security cost.  This essay addresses primarily the military aspect of the national security costs of our global oil-protection policy, which is truly enormous.  Beyond that is the potential cost associated with the risk that the oil to which we have become addicted may not be …

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We all know that King Abdullah wears long flowing robes.  What we don’t know is what he’s got up his sleeves.  Clearly the King wants to lower the price of oil, as discussed in my prior post.   How will he do it?  We know from the market’s action this week that it would be beyond stupid for the King to do no more on Sunday than announce another 200 kb/d of Saudi production, as has already been signaled to the market.  In terms of Saudi production, the King …

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What should we make of the Saudis call for the heads of state of oil consuming and producing countries - meaning all countries - to meet to discuss oil?  Is it possible, as Mr. Market seemed to think this morning, that the Saudis would go to all that trouble for naught?    Here’s what we know:

    1. Such a meeting is unprecedented on at least two levels.  The Saudis have never before stepped up to a global leadership role and there has never been a global meeting at such a …

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A remarkable poll shows that citizens are way ahead of politicians in understanding peak oil.  A huge majority in the U.S. and everywhere else (except Nigeria) say government action is needed to guide us toward a different source of energy because we are running short of oil.  If the U.S. presidential campaigns’ own polls find the same results, it may give the candidates courage to actually discuss energy policy realisticly.  It is clear that the public debate must become honest and realistic before there can be any likelihood of Congress …

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