SUBHEAD: In 2009, world oil demand dropped for only the second year in a row while prices rose.
Image above: Illustration of a last-chance-for-gas station in the American west. From http://eiuenergy.wordpress.com/2009/08/14/summertime-blues
[IB Editor's Note -- It is the editor's belief that oil market prices have been manipulated in 2009 (here's how), a continuation of what happened in mid-2008, as falling demand would have otherwise seen oil prices remain low or fall. It is believed that manipulation up to the $70 to $80 per barrel level is a key level that is sought for both new investment into alternative energy development and for fiscal balance in a number of OPEC nations.]
World oil production demand has dropped for the first time since the early 1980's for the second successive year, as the world economy remains confronted with the deepest and most wide-spread contraction since the 1930's.
This observation was made at the 155th extra-ordinary meeting of the conference of the Organization of Petroleum and Oil Exporting Countries (OPEC) that took place in the Angolan capital, Luanda last week.
In a media statement issued after the end of the conference, OPEC member States said that although the asset market prices have rebounded and economic growth has resumed in some parts of the world, it is not yet clear how strong or durable the recovery might be. "With the world still faced by shrinking industrial production, low private consumption and high unemployment, the conference once again decided to maintain current oil production levels unchanged for the time being," the media release said, Nampa quoted as saying.
The OPEC members States, in taking this decision, said that this is proof of their repeated commitment to the individually agreed production allocations, as well as their readiness to rapidly respond to any developments which might place oil market stability and their interests in jeopardy. The Secretariat is to continue closely monitoring the market, keeping member countries abreast of developments as they occur.
The situation will be reviewed at the next Ordinary Meeting of the Conference. In taking the above decision, Heads of Delegation reiterated OPEC's statutory commitment to providing an economic and regular supply of petroleum to consuming nations, whilst stabilizing the market and realizing the organization's objective of maintaining crude oil prices at fair and equitable levels, for the future well-being of the market and the benefit of both producers and consumers. The conference called on the non-OPEC producers and exporters to work closely with it to support oil markets stabilization in the interests of oil market stability.
Environmental concerns were also discussed at the conference, while the oil market outlook for 2010 was also reviewed. OPEC's mission is to co-ordinate and unify the petroleum policies of member countries, and ensure the stabilsation of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry. OPEC is a group of 12 states made up of Iran, Iraq, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates, Libya, Algeria, Nigeria, Angola, Venezuela and Ecuador.
Peak Oil Demand
By Julian Murdoch on 9 December 2009 in Seeking Alpha -
(http://seekingalpha.com/article/176440-peak-oil-demand)
Between recent consumption data and the International Energy Agency's World Energy Outlook 2009 report released last month, it's time for some serious questions when it comes to oil demand. Perhaps the biggest is this: Will oil fields be ready to meet existing and future demand, or will low investment in capital projects now cause bigger problems later down the line?
The big news on Monday was that U.S. oil demand keeps falling, according to the EIA, who said that U.S. oil demand in September was 2.74 percent lower than previously thought. September consumption came in at 18.362 million barrels per day—not a good sign for oil bulls who have been looking for any sign of strengthening U.S. oil demand to support higher prices.
Furthermore, yesterday's This Week In Petroleum report (covered extensively by Brad Zigler ) showed that once again, crude oil inventories rose. We now have over 24 days' worth of supply—a full 2 and a half days more than we had this time a year ago.
These numbers jive with the latest World Energy Outlook 2009 report (WEO '09), in which the IEA forecasts 2009's global energy use to actually fall for the first time since 1981. I can't say that forecast surprised anyone: From the oil company bigwigs to the minivan-driving soccer moms, many have predicted a drop in energy consumption due to the economic crisis. In fact, a recent survey by accounting and consulting firm BDO showed that oil executives aren't expecting energy demand to rebound until at least 2011.
What was surprising, however, was the WEO '09 long-term perspective on oil demand.
The Incredible Shrinking OECD Oil Demand
Between now and 2030, says the IEA, global oil demand will grow just 1 percent per year, with demand reaching 105 million barrels per day (mb/d) in 2030, or a 24 percent increase from 2008's demand of 85 mb/d. The IEA has been singing this tune for awhile; as The Oil Drum noted, the IEA has consistently dropped its 2030 demand numbers ever since its 2004 forecast of 121 mb/d. That 16 mb/d difference is a rather huge change of heart over the global financial crisis.
But what's most interesting is the specificity underpinning the demand numbers. Although demand is still forecast to increase, the real shocker here is the IEA's prediction that oil demand will actually drop for the next 20 years in OECD countries. Instead, the demand growth will come primarily from China, India and the Middle East:
Given that China and India are two of the fastest-growing economies in the world, growth there seems logical, but what's strange is the relatively large decrease in oil demand in the U.S., Canada and other OECD countries. Why the sudden decrease? Is it due to a sudden rash of widespread conservationism? Continued economic weakness? Or is it just that OECD countries tend to have slow, steady population rates, and their economies are at such a point that demand will remain relatively stable from here on out?
Regardless of the specific reason, the economic implications of this base scenario are somewhat staggering. If oil consumption is a sign of economic activity, then the implication here is that the U.S. is heading into an energy recession of epic proportions.
By Wisma Bernama on 29 December 2009 in Bernama.com -
Image above: Illustration of a last-chance-for-gas station in the American west. From http://eiuenergy.wordpress.com/2009/08/14/summertime-blues
[IB Editor's Note -- It is the editor's belief that oil market prices have been manipulated in 2009 (here's how), a continuation of what happened in mid-2008, as falling demand would have otherwise seen oil prices remain low or fall. It is believed that manipulation up to the $70 to $80 per barrel level is a key level that is sought for both new investment into alternative energy development and for fiscal balance in a number of OPEC nations.]
"World Demand For Oil Has Dropped: OPEC"
In a media statement issued after the end of the conference, OPEC member States said that although the asset market prices have rebounded and economic growth has resumed in some parts of the world, it is not yet clear how strong or durable the recovery might be. "With the world still faced by shrinking industrial production, low private consumption and high unemployment, the conference once again decided to maintain current oil production levels unchanged for the time being," the media release said, Nampa quoted as saying.
The OPEC members States, in taking this decision, said that this is proof of their repeated commitment to the individually agreed production allocations, as well as their readiness to rapidly respond to any developments which might place oil market stability and their interests in jeopardy. The Secretariat is to continue closely monitoring the market, keeping member countries abreast of developments as they occur.
The situation will be reviewed at the next Ordinary Meeting of the Conference. In taking the above decision, Heads of Delegation reiterated OPEC's statutory commitment to providing an economic and regular supply of petroleum to consuming nations, whilst stabilizing the market and realizing the organization's objective of maintaining crude oil prices at fair and equitable levels, for the future well-being of the market and the benefit of both producers and consumers. The conference called on the non-OPEC producers and exporters to work closely with it to support oil markets stabilization in the interests of oil market stability.
Environmental concerns were also discussed at the conference, while the oil market outlook for 2010 was also reviewed. OPEC's mission is to co-ordinate and unify the petroleum policies of member countries, and ensure the stabilsation of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry. OPEC is a group of 12 states made up of Iran, Iraq, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates, Libya, Algeria, Nigeria, Angola, Venezuela and Ecuador.
Peak Oil Demand
By Julian Murdoch on 9 December 2009 in Seeking Alpha -
(http://seekingalpha.com/article/176440-peak-oil-demand)
Between recent consumption data and the International Energy Agency's World Energy Outlook 2009 report released last month, it's time for some serious questions when it comes to oil demand. Perhaps the biggest is this: Will oil fields be ready to meet existing and future demand, or will low investment in capital projects now cause bigger problems later down the line?
The big news on Monday was that U.S. oil demand keeps falling, according to the EIA, who said that U.S. oil demand in September was 2.74 percent lower than previously thought. September consumption came in at 18.362 million barrels per day—not a good sign for oil bulls who have been looking for any sign of strengthening U.S. oil demand to support higher prices.
Furthermore, yesterday's This Week In Petroleum report (covered extensively by Brad Zigler ) showed that once again, crude oil inventories rose. We now have over 24 days' worth of supply—a full 2 and a half days more than we had this time a year ago.
These numbers jive with the latest World Energy Outlook 2009 report (WEO '09), in which the IEA forecasts 2009's global energy use to actually fall for the first time since 1981. I can't say that forecast surprised anyone: From the oil company bigwigs to the minivan-driving soccer moms, many have predicted a drop in energy consumption due to the economic crisis. In fact, a recent survey by accounting and consulting firm BDO showed that oil executives aren't expecting energy demand to rebound until at least 2011.
What was surprising, however, was the WEO '09 long-term perspective on oil demand.
The Incredible Shrinking OECD Oil Demand
Between now and 2030, says the IEA, global oil demand will grow just 1 percent per year, with demand reaching 105 million barrels per day (mb/d) in 2030, or a 24 percent increase from 2008's demand of 85 mb/d. The IEA has been singing this tune for awhile; as The Oil Drum noted, the IEA has consistently dropped its 2030 demand numbers ever since its 2004 forecast of 121 mb/d. That 16 mb/d difference is a rather huge change of heart over the global financial crisis.
But what's most interesting is the specificity underpinning the demand numbers. Although demand is still forecast to increase, the real shocker here is the IEA's prediction that oil demand will actually drop for the next 20 years in OECD countries. Instead, the demand growth will come primarily from China, India and the Middle East:
Regardless of the specific reason, the economic implications of this base scenario are somewhat staggering. If oil consumption is a sign of economic activity, then the implication here is that the U.S. is heading into an energy recession of epic proportions.
2 comments :
Good article!
Interesting data...thank you for this informative article!
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