Oil Storage Running Out

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horstfam's picture
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Oil Storage Running Out

 Here is a good article from "Time" magazine on the current state of oil:


Here is an excerpt:

Oil demand in rich countries has crashed since the onset of the economic crisis last year, and is now at its lowest level since about 1981, according to the Paris-based International Energy Agency. U.S. oil inventories — the stored surplus — this month reached their highest level since the 1980s. And about 2.6 billion barrels are currently stored in commercial tankers around the world. "There is some risk we will run out of storage space in the next four to six weeks," says Simon Wardell, director of global oil at IHS Global Insight, an energy-forecasting company in London. To oil-rich countries that possibility evokes grim memories of 1998, when the Asian economic crisis sent demand plummeting, driving world oil prices down to $10 a barrel. "If we run out of storage it could prompt a collapse in the price," says Wardell. Oil producers might then choose to dramatically cut output in order to run down the surplus. 


idoctor's picture
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Re: Oil Storage Running Out

If the economy does as bad as many think here on this site oil should drop in price one would think. The killer for the USA if we go into a depression is we do not have cheap oil (our own oil) to bail us out like in the last depression. All this so called investment in green energy may be a real back breaker for the USA if it bears little or very expensive fruit.

Vanityfox451's picture
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*... George Monbiots interview with Fatih Birol ...*


Thank you for putting this up. I've been waiting for this since watching George Monbiots interview with Fatih Birol, International Energy Authority's (IEA) chief economist last December when the new 'accounted' figures came out :-



... if you can imagine that power stations have to continue producing electricity overnight, even though there is no demand for it, because it would take well over a week to power back up if the station were shut down, (more, dependent on what variety of fuel ran it) , so, with a ceiling point of global oil storage hitting a maximum against a global depression, I don't see demand rising in time for all of the Worlds oil rigs to keep drawing oil out of the ground. In effect, oil rigs and refineries will take months to put back on line and at incredible cost. The use of sea water to raise pressure in the Ghawar Field in Saudi Arabia being a case in point; such complicated methods of extraction have and must maintain continuous flow.

This is getting incredibly tight. With just six weeks as a rule of thumb, a price volatility to hold value for exporters to maintain there economies and, importers reaching a maximum storage in their facilities, this is juggling a great deal more than a dozen eggs. Come what may, the effects are months ahead and yet the wall could well be in full view ...

... just my 2 cents (IMHO) ... don't panic!!!!

One very good thesis I've read several times from 'The Oil Drum', written by Gail The Actuary, is well worth a read if you haven't already. So much fact within it has had me going back to it again and again, proving how very prescient the article actually is :-



... I wonder if 'Quantitative Easing' is going to give the desired effect that World Government has in mind ...

... Now, where's that bottle of Scotch ...




Damnthematrix's picture
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Re: Oil Storage Running Out

The latest peak oil projection: a stunning difference

A session with a leading Peak Oil supporter can always be a sobering experience. That was certainly the case May 28 at the "New Challenges for Crude Oil" conference in Geneva, where the president of main international Peak Oil group spoke.

Swedish professor Kjell Aleklett is actually a physics professor at Uppsale Universit, not a geology professor. But he is also the president of the Association for the Study of Peak Oil, and he was chair of the Platts' conference.

He is about to present a paper for peer review and inclusion in the academic magazine Energy Policy. That paper will take issue with the International Energy Agency projections on oil supply out to 2030, by an enormous factor.

The difference between the IEA and Aleklett's work is fairly straightforward. Aleklett adopts what he calls a "parameter" in determing the rate of depletion in fields that have yet to be developed or fields yet to be discovered, two key elements in the IEA's projections.

The gap between his work and that of the IEA is huge. IEA projections of liquids supply see total output of 101.5 million b/d by 2030. Aleklett's research sees it at a little more than 75 million b/d.

There are numerous areas where Aleklett said his research agreed with the IEA, including the projected rate of decline of existing fields. But beyond that, what Aleklett says are the different approaches toward depletion rates creates enormous differences in projections out to 2030. Output in fields to be developed would be 22.5 million b/d in the IEA forecast; it's 13.6 in Aleklett's. The difference in fields yet to be discovered is 19.2 million b/d vs. 8.7 million b/d.

Aleklett, like other Peak Oil proponents, also criticized the IEA practice of counting all barrels of NGLs equally with a barrel of crude, even though the BTU content is not equal.

Aleklett's conclusions also hinted at a politically-driven agenda at IEA. He said the agency often takes the approach of "you should rely on us because we are telling you the truth, and governments around the world trust the IEA." The IEA's forecast on the rate of depletion is "outside reality."

IEA forecasts are "demand-driven," he said, assuming that if global economic growth averages 3%, "that is driving production." "They're giving oil supply estimates to support GDP esimtates," he said. "They are not allowed to give oil that does not show an increase in GDP in the future."

RayTomes's picture
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Re: Oil Storage Running Out
horstfam wrote:

Here is a good article from "Time" magazine on the current state of oil:



To oil-rich countries that possibility evokes grim memories of 1998, when the Asian economic crisis sent demand plummeting, driving world oil prices down to $10 a barrel.

My analysis of cycles in oil done in 2005 predicted a peak in early 2008, a trough in late 2010 or early 2011 and another peak in late 2013 when prices should reach the general vicinity of $300/b. At that point the longer term cycle would have reached its high point. See http://www.cyclesresearchinstitute.org/journal/CRI200511-oilprices.pdf

I should add that subsequent research shows that the 30 year cycle has existed for well over 100 years and so should be treated as real. In the article referenced it was treated as more doubtful because the history available in that treatment was rather shorter.

So I agree that a downward trend for another year or so is rather likely, but I expect that the next rise will be like the second oil shock in the late 1970s in breaking all records.


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