by Xenophobe » Sun 07 Nov 2010, 19:21:47
$this->bbcode_second_pass_quote('davep', '
')Huh? The fact that there is an increase in stockpiles means that demand is less than supply. It's pretty simple.
I don't think it works that way. Demand for a thing, like oil, is almost always higher than actual supply. For example, economic demand means someone wants a thing, not necessarily that they can afford it. Everyone, for example, can say, "I demand a new car!" but only maybe 12 million people a year act on that demand through the mechanism of price. The 12 million people buying new cars now defines consumption. The people buying oil defines consumption the same way. Consumption of oil certainly has been flat for awhile now, and shows up in various growing stockpiles.

Reserves are calculated on their economic and geologic certainty, not on the expected demand. The fungible nature of oil gets in the way of calculating some of this, for example OPEC countries can just dial back the taps anytime they want, creating the necessary
surplus capacity between consumption and supply...but the consumption/supply relationship isn't the same as the demand/supply relationship.