API is reporting 3.6 million barrel more crude, 1.6 million more barrels of Gasoline and Distillate down 1.3 million barrels which was expected on distillate for heating oil, but crude build and gasoline build were high...... my best day was watch S&P taking a blood bath yesterday and today and will be even worse tomorrow, government sueing them for over 5 billion on those mortage back security they rated, next will be Moody`s and then Fitch. Check MHP for a post i put up with the government report, they knew the market would crash.
We are in a OIL Glut ! soon there will be more oil than water in cushing ,OK .The banks and other institutions just pumping the prices up to extract money from consumers .
Sentiment: Strong Sell
"First of all, the other liquids are not substitutable for most purposes."
Well, that's hardly true. "Most" purposes? Maybe "some" purposes. But you isolate only one; transportation. But never mind. Every barrel of "other liquid" displaces another barrel of petroleum the products of which can be used for transport, so, in that respect "it does not matter". As for supply growth, there's no doubt it has slowed, but that has happened in other times as well for periods of several years. (early 80s, early 90s) and you continue to discount the recession.
I've explained already how OPEC has controlled not just production, but OUR CONSUMPTION for DECADES, so I won't walk you through that again. Renders your production/price thing moot, but never mind that either. You also continue to leave out the recession where oil fell to 40/bbl and as I'm sure you know, ramping production is not the same as turning on a switch. Continued economic uncertainty means that though you may be drilling $100 oil, excess supply may drive prices south in a NY minute - 2008 was proof of that.
Lisa, you're going to believe what you want to believe about the price of oil and its scarcity. You pays your money and you takes your chances. You are the guy betting on the future of the horse and buggy in the late 18th century. Other energy sources are catching up, that's just a fact. And I'm not an environmentalist whacko either, but I can read the tea leaves. Go pipeline, go oils sands, etc. My personal opinion is that solar will be the eventual winner - though that may take a few decades. Why? Because it's clean and inexaustable - for now it's just a little too expensive. Solar has gotten ahead of itself, but as the technology improves and cheapens it will emerge the winner.
There's an obvious flaw in that argument.
If oil were overpriced due to manipulation, producers would cash in to take advantage of the situation by producing more of it. However global oil production has been stuck at the same level for the last 7 years, despite record high prices.
If the price was really much higher than production cost, do you not think producers would produce as much as they could for big profits? Of course they would. But since global oil production has not increased since 2005, even with prices at $100 or above, it proves pretty clearly that they are not able to produce any more and have not been able to for the last 7 years.
Yes, US production is back to 2003 levels but that is nothing relative to US production 50 years ago. Look at a graph of US production since 1970 to get a perspective just how small the recent production increases have been relative to the declines which preceeded them for over 40 years. On top of which, the increase in US production has been offset by declines elsewhere in non-OPEC leaving no increase in global production.
"World oil demands are increasing every year, that's true. But supplies are increasing faster than demand now."
Far from the truth. Global crude oil production (supply) has not increased since 2005. It increased steadily until 2005 and has been stuck on a plateau since then. True, 'other liquids' have increased slightly, however they are not oil and do not have the energy content of crude oil (plus they have lower EROEI). All the increase in production from USA has been offset by declines elsewhere in non-OPEC.
"Far from the truth. Global crude oil production (supply) has not increased since 2005. It increased steadily until 2005 and has been stuck on a plateau since then."
When you're wrong, you're wrong ... and you're wrong.
First, oil supply did plateau in 2005 - for about two years. Now it is increaseing again with a brief dip during the recession. You can argue "purity" all you want but the world standard is changing. You can argue sources all you want, but WORLD oil supply - which is what matters - is increasing, from about 85M bbl/day in 2005 to nearly 91M in 2012.
for the answer to why oil and gas are rising look no further than our beloved TbTF banks...take a look at their net hoarded oil positions since end of last year.....golden showers now owns more oil and refined gas than most refineries do......once again what does a BANK need with oil huge supply of hoarded gas and oil
By Myra P. Saefong CLH3
SAN FRANCISCO (MarketWatch) -- Crude-oil supplies rose a bit more expected for the week ended Feb. 1, according to data from the American Petroleum Institute issued late Tuesday. Crude supplies rose 3.6 million barrels. Analysts polled by Platts were looking for a 3 million-barrel climb. Gasoline inventories were up 1.6 million barrels, while distillate stockpiles were down 1.45 million barrels, the report from the trade group said. Analysts forecast gasoline stocks to be up 1.75 million barrels and expected a fall of 750,000 barrels in distillate supplies. The API data come ahead of the more closely watched U.S. Energy Information Administration report due Wednesday. Ahead of the API report, March crude /quotes/zigman/2291769 CLH3 -0.82% settled at $96.64 a barrel, up 0.5%.