Homestead mailing list

[Clansgian AT wmconnect.com]

In a message dated 6/13/2007 8:43:41 AM Eastern Daylight Time, 
becida AT comcast.net writes:


> The IEA now expects demand for oil to rise by 

> 1.7m barrels a day this year compared to last 

> year – an increase of about 2 per cent – and 

> non-Opec oil supply to rise by just 900,000 b/d. 

> That rise in demand is 167,000 b/d more than the 

> IEA had previously estimated, while the rise in 

> non-Opec supply is 97,000 b/d less

It's worse than that.   The IEA is considered by many who watch the world oil 
situation to be a cheering section for the oil industry and always reporting 
the absolute rosiest picture the data will allow (with some bending).  The 
IEA's projections are to be taken with the same amount of confidence that the 
NAR's projections about the bursting of the housing bubble being a minor and 
expected correction, and then only affecting certain areas (location, 
location, 
location!!).

Both OPEC and non-OPEC production are declining.  The reported rise is a 
clever massage of the data.   In the entire history of the oil age, there has 
always been a swing producer so that when demand exceeded supply, the swing 
producer could opan the spigot and moderate prices.  Until 1970 the swing 
producer 
was the US, since then it has been Saudi Arabia.  Until this year.

In the early winter those speculating on whether the wold had reached Peak 
Oil said that if supply exceeded demand in the early summer and Saudi Arabia 
increased production to offset the demand, it would be proof that we were not 
yet 
at Peak Oil.  But if demand rose and Saudi Arabia did not act as swing 
producer and fill the demand, giving whatever reason or excuse, it was very 
strong 
evidence that SA was at their peak production.  SA being at peak production 
is 
about like saying the world is at peak production.

SA's output is declining and the decline in the world oil supply is being 
filled by Niger and Russia and other producers.  All other major oil 
producers 
are in decline:  Saudi Arabia, Mexico, North Sea, Alaska, Venezuela, etc.

Also there is the phenomenon that as money from the sale of oil is pouring 
into oil producing countries, the demand for a oil based lifestyle of 
automobiles and air conditioning is rising.  For example, the country that 
produces more 
oil than any other is .......

Russia.   Not Saudi Arabia.

Saudi Arabia EXPORTS more oil than any other, but it is second in produciton. 
 The reason is that Russia has a far greater population and they are wanting 
to use more and more of their own oil.

Not only is the demand for oil rising in countries with net oil imports, such 
as the US, but demand - fueled by rising wealth from oil exports - is rising 
even faster in oil producing countries and driving up the price even faster.  
 
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