roachboy, temporarily, demand has outpaced supply, more supply is predicted to come on line in the next two years, as high prices push down demand, and the price of oil will plummet. I predict $2.00 gasoline in the US, in the next 18 months, and the cycle will play out again, as it did in '86 and in '98......
We in the US use 25 percent of entire world daily output, everyday....21 million bbls of petroleum equivalents, more than 60 percent of it imported. I think US consumption will drop 7 or 8 percent between now and next memorial day, especially if gasoline price stays above $3.50, for much of that time span.
Quote:
http://www.news.com.au/business/stor...00-462,00.html
http://online.wsj.com/article/SB1212...fox_australian
Oil exporters unable to match demand
By Neil King and Spencer Swartz in New York
May 30, 2008 04:21am
Article from: The Australian
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THE world's top oil producers are proving unable to put more barrels on thirsty world markets despite sky-high prices, a shift that defies traditional market logic and looks set to continue.
Fresh data from the US Department of Energy shows the amount of petroleum products shipped by the world's top oil exporters fell 2.5 per cent last year, despite a 57 per cent increase in prices, a trend that appears to be holding true this year as well.
There are several reasons behind the net export decline. Soaring profits from high-price crude have fuelled a boom in oil demand in Saudi Arabia and across the Middle East, leaving less oil for export. At the same time, ageing fields and sluggish investments have caused exports to drop significantly in Mexico, Norway and Russia.
The Organisation of Petroleum Exporting Countries also cut production early last year and did not move to boost supplies again until last northern autumn.
In all, according to the Energy Department figures, net exports by the world's top 15 suppliers, which account for 45 per cent of all production, fell by nearly a million barrels to 38.7 million barrels a day last year. The drop would have been steeper if not for heightened output in less developed countries such as Angola and Libya, which are not big energy consumers.
For all the attention paid to China's increasing energy thirst, rising energy demand in the Middle East may pose the greater challenge. Last year, the region's six largest petroleum exporters - Saudi Arabia, United Arab Emirates, Iran, Kuwait, Iraq and Qatar - curbed their output by 544,000 barrels a day. At the same time, their domestic demand increased by 318,000 barrels a day, leading to a loss in net exports of 862,000 barrels a day, according to the U.S. Energy Information Administration.
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Why do you think these guys are sitting on their hands? They have a disincentive, this late in the cycle, to commit to increasing supply, because it will come online into what they forsee, will be a glut of new supply, during a period of an economic contraction that gained momentum from the previous price spikes.....
Quote:
http://www.cattlenetwork.com/Content...ntentID=220014
5/8/2008 1:17:00 PM
TALES OF THE TAPE: Oil Companies Focus On Buybacks, Not Renewables
HOUSTON (Dow Jones)--The most recent earnings reports from the oil giants show that despite pressures to spend part of their eye-popping profits in alternative-energy projects, oil companies are sticking to their guns by bolstering share-buyback programs and putting off major portfolio diversification.
....Chevron Plans Buyback Of Up To $15B
Smaller peers Chevron Crop. (CVX) and ConocoPhillips have made bigger commitments than Exxon toward investing in renewable fuels; however, they are investing much more in buying back their own shares.
While Chevron said last year it will spend up to $15 billion in share buybacks over the next three years, the company will invest $2.5 billion from 2007 to 2009 in renewable-energy projects and energy-efficiency services.
"We are investing aggressively in new energy projects to boost production, and we are looking for researching opportunities," said Chevron spokesman Kurt Glaubitz.
ConocoPhillips Chief Executive Jim Mulva said two weeks ago that if the Houston company finds itself with extra cash at the end of the year, it will likely increase its share-repurchase program rather than bolster its project investment. Mulva said in March, however, that ConocoPhillips, the third-largest U.S. oil company by market value, could spend up to $3 billion acquiring a non-corn-based ethanol business. He said any larger acquisitions were unlikely.....
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This was why I did a recent thread proposing US government takeover of the petroleum exploration, drilling, and refining businesses in the US. It is no longer a business to be left to private business to be trusted with the responsibility of providing a prolific, lowest possible priced, domestically sourced supply of energy. This is a business that does not respond to classic demand driven price incentives, because the price rises, just as it does in homebuilding, to the point that the market gets crushed, collides with a growing supply, and kills the suppliers who are more nimble than they are greedy and ambitious. All of the national scale homebuilders will be bankrupted in the next four years, and the major oil companies will do their best now to be lean, mean, and underinvested in exploratory petroleum projects, until just before the next cycle low.....4 or 5 years from now.