OIL: Demand, Production and Speculation
Yes, demand for Oil is only increasing, but here are six reasons why oil is over $50 per barrel and should not be.....
1. Over the last five years, for geo-political reasons, U.S. oil imports have been shifted away from the Persian Gulf. The order of the nations from which the United States imported oil during the first quarter of 2004 was:1. Canada (2.12 mbd); 2. Mexico (1.60 mbd); 3. Venezuela (1.54 mbd); and 4.Saudi Arabia (1.46 mbd).
2. The alleged stranglehold that the "Arabs" have over U.S. oil supplies,does not exist. America receives less than one-fifth of its imported oil from the Persian Gulf, while by contrast, it gets more than half of its imports from four countries: Canada, Venezuela, Mexico in the Western Hemisphere, and Nigeria.
3. What remains of the Seven Sisters - the Oil Cartel has reduced U.S. oil refining capacity to below the level of 1980. Furthermore, physical deliveries of Brent Crude, produced in 19 North Sea oil fields, are imploding. During the early 1990s, daily production of Brent Crude was about 700,000 barrels per day (bpd), but it fell to 570,000 bpd in1999; 385,000 bpd in 2002, 327,000 bpd in 2003. According to the energy research firm Platts, it will sink further to 277,000 bpd this year.
4. The biggest oil derivatives traders which run trading on the IPE (International Petroleum Exchange) include Barclays Capital, Bear Stearns International, J.P. Morgan Securities,Deutsche Futures London, BP Oil International, Shell International Trading and so forth.
5. London's (IPE), has reported that its trade with Brent Crude oil contracts reached 375 million barrels in open-interest contracts on May 14, 2004, the highest level ever. This is about five times the total daily production of all sorts of oil worldwide. The daily turnover of Brent Crude future contracts at the IPE now approximates twice the global daily production of oil.
The outstanding amount of speculative Brent Crude futures on May 14 surpassed the daily physical production by a factor of 1,250.
6. Spculators purchase on the IPE and NYMEX exchanges, futures contracts; each single contract is a bet on 1,000 barrels of oil. More than 100 million of these oil derivatives contracts were traded on these exchanges in 2003, representing 100 billion barrels of oil.
To put this in perspective, in 2000, for every 570 "paperbarrels of oil"- that is futures derivatives covering 570 barrels-traded each year, there was only one underlying physical barrel of oil. The 570 paper oil contracts pull the price of the underlying barrel of oil, manipulating the oil price. If the speculators bet long-that the price will rise-the mountain of bets pulls up the underlying price.
$130 Oil Justified? No Way
Oil Price Redux
OIL: Demand, Production and Speculation
Peak Oil - The Myth, The Legend, The Fraud
Spreading "Peak Oil" Crack
"Peking" Oil, the Saudis and China
Peak Oil? Not!
Peak Oil? Not! Part Deux
Peak Oil? Not! - Update
Peak Oil Redux Part I
Peak Oil Redux - Part II
Peak Oil Redux Part III
Peak Oil Redux Part IV
Peak Oil Redux Part V
Peak Oil Redux Part VI
Peak Oil Redux Part VII
Peak Oil Redux Part VIII
The Blame for $135 a Barrel Oil
Blame it on Markman's Myopia or The Day They Burned Ol' Dixie Down - A "Peak Oil" Commentary
Another Peak Oil Cufuffle Series
1. Over the last five years, for geo-political reasons, U.S. oil imports have been shifted away from the Persian Gulf. The order of the nations from which the United States imported oil during the first quarter of 2004 was:1. Canada (2.12 mbd); 2. Mexico (1.60 mbd); 3. Venezuela (1.54 mbd); and 4.Saudi Arabia (1.46 mbd).
2. The alleged stranglehold that the "Arabs" have over U.S. oil supplies,does not exist. America receives less than one-fifth of its imported oil from the Persian Gulf, while by contrast, it gets more than half of its imports from four countries: Canada, Venezuela, Mexico in the Western Hemisphere, and Nigeria.
3. What remains of the Seven Sisters - the Oil Cartel has reduced U.S. oil refining capacity to below the level of 1980. Furthermore, physical deliveries of Brent Crude, produced in 19 North Sea oil fields, are imploding. During the early 1990s, daily production of Brent Crude was about 700,000 barrels per day (bpd), but it fell to 570,000 bpd in1999; 385,000 bpd in 2002, 327,000 bpd in 2003. According to the energy research firm Platts, it will sink further to 277,000 bpd this year.
4. The biggest oil derivatives traders which run trading on the IPE (International Petroleum Exchange) include Barclays Capital, Bear Stearns International, J.P. Morgan Securities,Deutsche Futures London, BP Oil International, Shell International Trading and so forth.
5. London's (IPE), has reported that its trade with Brent Crude oil contracts reached 375 million barrels in open-interest contracts on May 14, 2004, the highest level ever. This is about five times the total daily production of all sorts of oil worldwide. The daily turnover of Brent Crude future contracts at the IPE now approximates twice the global daily production of oil.
The outstanding amount of speculative Brent Crude futures on May 14 surpassed the daily physical production by a factor of 1,250.
6. Spculators purchase on the IPE and NYMEX exchanges, futures contracts; each single contract is a bet on 1,000 barrels of oil. More than 100 million of these oil derivatives contracts were traded on these exchanges in 2003, representing 100 billion barrels of oil.
To put this in perspective, in 2000, for every 570 "paperbarrels of oil"- that is futures derivatives covering 570 barrels-traded each year, there was only one underlying physical barrel of oil. The 570 paper oil contracts pull the price of the underlying barrel of oil, manipulating the oil price. If the speculators bet long-that the price will rise-the mountain of bets pulls up the underlying price.
$130 Oil Justified? No Way
Oil Price Redux
OIL: Demand, Production and Speculation
Peak Oil - The Myth, The Legend, The Fraud
Spreading "Peak Oil" Crack
"Peking" Oil, the Saudis and China
Peak Oil? Not!
Peak Oil? Not! Part Deux
Peak Oil? Not! - Update
Peak Oil Redux Part I
Peak Oil Redux - Part II
Peak Oil Redux Part III
Peak Oil Redux Part IV
Peak Oil Redux Part V
Peak Oil Redux Part VI
Peak Oil Redux Part VII
Peak Oil Redux Part VIII
The Blame for $135 a Barrel Oil
Blame it on Markman's Myopia or The Day They Burned Ol' Dixie Down - A "Peak Oil" Commentary
Another Peak Oil Cufuffle Series
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