Article

2006-04-23 International-UN-NGOs

OPEC says oil inventories at comfortable levels

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Posted by Steve White 2006-04-23 00:00|| || Front Page|| [1 views since 2007-05-07] Top

#1 I don't know if OPEC is being deliberately disengenous(aka lying) or they just don't understand how markets work. But I'll spell it out.

As long as markets are allowed to function there will never be a physical shortage. The level of stocks is irrelevant (although they are used as a proxy for supply demand balance).

The increase in price is due to an increase in demand relative to supply. The equation is very simple, all economic activity in the aggregate, requires energy inputs. Global economic growth is in the region of 4% per annum. Therefore the increase in demand for energy is 4% per annum (minus a stable long term trend in increasing energy efficiency about 0.7%), i.e. demand is increasing at a little over 3% per annum and supply aint keeping up.

Posted by phil_b">phil_b 2006-04-23 03:18|| http://autonomousoperation.blogspot.com/]">[http://autonomousoperation.blogspot.com/] 2006-04-23 03:18|| Front Page Top

#2 if you want to follow official oil inventories, go to:

http://tonto.eia.doe.gov/oog/info/twip/twip_crude.html

it turns out that oil inventories are about 8% above last year

gasoline inventories are, however, a bit below last year; refining capacity is not completely recovered from last year's hurricanes

Posted by mhw 2006-04-23 11:42|| 2006-04-23 11:42|| Front Page Top

#3 it's speculation that Iran et al may either NOT be shipping or will be at lesser levels due to their calling warheads down upon themselves

Posted by Frank G">Frank G 2006-04-23 12:41|| 2006-04-23 12:41|| Front Page Top

#4 Agreed, the market is anticipating some damage and disruption in the Persian Gulf. Now that we're past the winter heating season, the damage and disruption should occur sooner rather than later. This week may be a good time to top off your heating oil tank. Iran's UNSC deadline is Friday. That's probably as good an opportunity as Bush is going to get before spring of 2007. Any further "diplomacy" just risks more problems with the heating oil supply for next winter.

Posted by Darrell 2006-04-23 17:24|| 2006-04-23 17:24|| Front Page Top

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