[DantesPeak]

IEA also sees demand outrunning supplies within three years.

$this->bbcode_second_pass_quote('', 'I')EA raises world oil demand forecast, cautions OPEC
Tue Feb 13, 2007 11:10 AM GMT

LONDON (Reuters) - The International Energy Agency has raised its forecast for 2007 world oil demand growth following revisions to its outlook for China and told OPEC that any further supply cuts could markedly tighten the market.

The agency that advises 26 industrialised nations said on Tuesday oil stocks held by its members fell by 40.2 million barrels in December and the downward trend continued in January as OPEC output cuts already in train began to bite.

The IEA raised its global oil demand growth forecast for 2007 to 1.55 million barrels per day, or 1.8 percent, from 1.39 million bpd, or 1.6 percent, at the time of its January report.

It said strong demand from China, the world's second biggest fuel burner, had lifted non-OECD oil demand growth to 3.2 percent in 2007 from 3 percent in the IEA's previous monthly report.

[cudabachi]

Thanks DantesPeak!

Just saw this story on the Schwab website and was going to post it here but figured I'd better check to see if someone had beaten me to the punch.

As usual, you're way ahead of me.

[DantesPeak]

OPEC seems to be in total agreement with the IEA on supply reductions for 2007:

$this->bbcode_second_pass_quote('', 'O')PEC Cuts Non-Member Supply Forecast on Mexico, U.S. (Update2)

By Stephen Voss

Feb. 15 (Bloomberg) -- OPEC, the producer of 40 percent of the world's oil, cut its forecast for 2007 supply from non- members mainly because of delays at North American projects and left its world demand estimate ``broadly unchanged.''

Countries outside of the Organization of Petroleum Exporting Countries are expected to pump 50.7 million barrels a day this year, OPEC's Vienna-based secretariat said in its Monthly Oil Market Report. That's 173,000 barrels a day less than its previous forecast, OPEC said, citing delays such as the BP Plc-operated Atlantis project in the U.S. Gulf of Mexico.

``The revision is principally due to lower supply expectations for Mexico, U.S. and Canada,'' OPEC said today. While mild weather could reduce world demand, ``the weaker-than- expected performance in non-OPEC supply, due to project delays and unexpected output declines, may be sufficient to offset the decline in the forecast demand.''

OPEC expects world oil demand to average 85.37 million barrels a day this year, ``broadly unchanged'' from its previous estimate of 85.39 million. Consumption will be 1.24 million barrels a day, or 1.5 percent, higher than in 2006.

In its report today, OPEC calculated the quantity of OPEC crude oil needed to balance world supply and demand at 30.25 million barrels a day for all of 2007, and 29.2 million barrels a day for the second quarter, when demand is typically lowest.

The 2007 estimate, known as the ``call on OPEC,'' was about 160,000 barrels a day higher than last month's report as a result of the reduced estimates for non-OPEC supply.

[basil_hayden]

Last time the oil companies came to feed at the consumer trough, they had an excuse called Katrina.

This time, they're going to make it happen without hurricanes.

[kevincarter]

All I can say is: Give me an F!

[vision-master]

$this->bbcode_second_pass_quote('kevincarter', 'A')ll I can say is: Give me an F!

[Heading_for_the_hills]

I posted on the home page a question pertaining to the article and numbers quoted. If IEA is anticipating consumption to be 86 million barrels a day then has demand not exceed supply? I thought only 85 million barrels a day were produced. Am I wrong in that? So would it not stand to reason that the "peak" is in the rearview mirror?

[FireJack]

It's starting to look really bad, if this summer shortages start to appear everything is going to change. Wish I had my own place with a stockpile of food and a vegtable garden right now. Mabey I can find someone who does.

[DantesPeak]

The IEA warned of a developing worldwide inventory problem as early two months ago in informal comments. The formal statement today is more dire.

I have been trying to figure out for the last three months why the oil markets are ignoring the fastest drop in inventories in history (barring periods of embargo, strikes or war). When this question was posed to Michael Lynch in the disputing peak oil thread a few months ago, he basically stated that since the capacity to produce more oil was there, there was nothing to worry about (except political problems).

The inventory drop is primarily not being caused by political problems, although politically related production problems in Nigeria and Iraq are worse than six months ago.

There seems to be a presumption in the oil markets, at least in the US, that sufficient imports will always be available. It’s not clear why the markets have ignored large OPEC production cuts from those countries exporting directly to the US. So the markets are ignoring falling import levels, and also, a rise in domestic consumption. Further, most energy analysts somehow fail to realize that lack of snow and warmer winter weather has increased gasoline use more than the fall in heating oil demand. Heavy oil use by utilities has been largely converted in recent years to natural gas use – which is like jumping out of the frying pan into the fire.

Anyway, I don’t suppose the markets will suddenly wake up today and realize there is a major energy problem developing. They will still believe Saudi Arabia will ride to rescue as soon as needed, and besides, what about all those new fields coming on line?

As far as specifics go, when US gasoline inventories get to around 190 million barrels, localized shortages may develop. Last week the figure was 216 million barrels, and it may take 3 to 6 months to get to the critical level that may wake up the masses.

[kmann]

$this->bbcode_second_pass_quote('Gideon', '
') Anybody who has been following the oil supply situation for a long time want to comment on how unusual this "unusual" drawdown is?

How about the IEA's request to OPEC?


Any speculation as to whether this means that the supply/production gap is now widening, irrevesibly, or is this just a micro data point.

[scienceteacher]

Where can one find regular online data for "stocks and production" ?

[kmann]

http://www.eia.doe.gov/ for the info on US

http://omrpublic.iea.org/ for international

[MonteQuest]

$this->bbcode_second_pass_quote('Heading_for_the_hills', 'I') posted on the home page a question pertaining to the article and numbers quoted. If IEA is anticipating consumption to be 86 million barrels a day then has demand not exceed supply? I thought only 85 million barrels a day were produced. Am I wrong in that? So would it not stand to reason that the "peak" is in the rearview mirror?

[bighuey]

WHy has the oil price been dropping the last couple days(just closed at like 58 ) while,while gas prices keep rising? Could this all be a scam. I mean, it is more profitable for the refiners to just restrict supply on the finished product end without bidding up the price of crude that they have to pay.

[MonteQuest]

$this->bbcode_second_pass_quote('bighuey', 'W')Hy has the oil price been dropping the last couple days(just closed at like 58 ) while,while gas prices keep rising? Could this all be a scam. I mean, it is more profitable for the refiners to just restrict supply on the finished product end without bidding up the price of crude that they have to pay.

[seldom_seen]

$this->bbcode_second_pass_quote('', 'i')nventories were being sucked lower at an unusually high pace this year, leading it to fret about demand being met in the coming months and amplifying the need for more crude from the Organization of Petroleum Exporting Countries.

[magician]

damn mabe i should be getting that 1960's chinese hand crank generator i was looking to convert to a 50 watt bicycle generator.

[Newsseeker]

Creating a cartel of gas exporting countries would hurt producers and consumers alike, the head of the International Energy Agency said on Tuesday.

Speculation about a gas cartel, potentially including Russia, Iran, Qatar and Algeria, has grown since Iranian Supreme Leader Ayatollah Ali Khamanei aired the idea in January.

He said Iran and Russia had half the world's gas reserves and could establish a group like the Organization of the Petroleum Exporting Countries (OPEC).
link

This is probably America's worst nightmare: to have Iran and Russia calling the shots on how much LNG is going to be. No wonder the IEA slammed it.

[cube]

For anybody who reads my posts you'll notice that I'm a strong supporter of the "free market". However that's not really true.

I'm actually an advocate for making money! And since extortion pays handsomely that should be the first means attempted.

I like the idea. It's about time the world pays "market value" for energy.

[Twilight]

Cartels hurt producers? Maybe if we repeat that often enough they will believe us?