[oilluber]

great points, also consider the world wide demand,
the devaluation in the USD,
and things don't look very good for the US citizen
as far as cheap gasoline is concerned.

[pup55]

The numbers are compelling.

Here is a graph of US refining capacity since 2000.

In this seven year period, overall refinery capacity has increased on average by about 0.7% per year. In the last year, it has increased by 0.2%.

So if I were an economist, instead of some guy on the internet, I would say that the lack of spare capacity has led to this increase in prices which has cut demand growth to about the same level as the growth in capacity, which makes sense, if you think about it.

The system is constrained by the least abundant resource.

Also the refinery utilization is not as high as it was during the early part of the decade, which has made the situation even worse. In fact, the unleaded production last week was only 3.8% higher than it was on December 15, 1999. The only reason we are where we are is the increase in imported finished goods, which makes up the difference in consumption. This will go on until the refiners in the exporting countries (mainly Europe) become capacity constrained, which they now are.

If we had abundant gas, the price would go down, and we would use more. Actually, we are using all of the gas we can, at any given time.

As we know, and as we calculated the other day, we are still not at the level of "reinvestment economics" for one of these refiners. The price is still not high enough to justify anyone doing anything except this incremental debottlenecking. So, the situation will continue for awhile. Actually, the situation will get worse. As the refinery utilization continues to deteriorate, net growth in production will approach zero, so growth in consumption will be limited to how much extra we can import. The effects of the debottlenecking will roughly offset the effects of the deteriorating crude oil quality.

Growth in price will be greater than zero, though. Also anyone that cannot afford it will have to do without their gas.

[AirlinePilot]

$this->bbcode_second_pass_quote('pup55', '
')If we had abundant gas, the price would go down, and we would use more. Actually, we are using all of the gas we can, at any given time............

Growth in price will be greater than zero, though. Also anyone that cannot afford it will have to do without their gas.

[Oil-Finder]

--> LINK <--

$this->bbcode_second_pass_quote('', 'A')fter months of near-record-high gasoline prices, U.S. motorists are apparently finally cutting back on their fuel purchases.

For the past 12 weeks, the amount of gasoline bought nationwide was 1.5 percent lower than it was for the same 12-week period a year earlier, according to data collected by the Energy Information Administration, the statistical division of the U.S. Department of Energy.

The amount of gasoline purchased between the weeks Nov. 30 to Feb. 15 averaged 8.99 million barrels per day, down from an average of 9.13 million barrels per day, for the same 12 weeks from November 2006 to February 2007.

[The_Toecutter]

We can drop gasoline consumption perhaps 30% before Americans no longer buy enough gas to drive to work. We will adapt over the next few years, but it will be a scary few years. They will not be as scary as the years that come after them.

[Heineken]

If gas consumption drops that will mean they can't build any more Jiffy-Foods out on I-89297J.

Get the drift?

[joewp]

$this->bbcode_second_pass_quote('Heineken', 'I')f gas consumption drops that will mean they can't build any more Jiffy-Foods out on I-89297J.

Get the drift?

[KillTheHumans]

$this->bbcode_second_pass_quote('pstarr', '
')Oh wait. This yearly 1.5% decline in American gasoline demand (only 1/3 of our total petroleum use, so the decline is really .5%) is a pittance compared to the ongoing decline in the Mexican oilfields (10%), our 3nd largest supplier of petroleum (after ourselves and Canada).

[dinopello]

If consumption drops but prices do not follow... This is bad news, no?

[DantesPeak]

$this->bbcode_second_pass_quote('Oil-Finder', '-')-> LINK <--

$this->bbcode_second_pass_quote('', 'A')fter months of near-record-high gasoline prices, U.S. motorists are apparently finally cutting back on their fuel purchases.

For the past 12 weeks, the amount of gasoline bought nationwide was 1.5 percent lower than it was for the same 12-week period a year earlier, according to data collected by the Energy Information Administration, the statistical division of the U.S. Department of Energy.

The amount of gasoline purchased between the weeks Nov. 30 to Feb. 15 averaged 8.99 million barrels per day, down from an average of 9.13 million barrels per day, for the same 12 weeks from November 2006 to February 2007.

[DantesPeak]

$this->bbcode_second_pass_quote('KillTheHumans', '')$this->bbcode_second_pass_quote('pstarr', '
')Oh wait. This yearly 1.5% decline in American gasoline demand (only 1/3 of our total petroleum use, so the decline is really .5%) is a pittance compared to the ongoing decline in the Mexican oilfields (10%), our 3nd largest supplier of petroleum (after ourselves and Canada).

[DantesPeak]

$this->bbcode_second_pass_quote('KillTheHumans', '')$this->bbcode_second_pass_quote('pstarr', '
')Oh wait. This yearly 1.5% decline in American gasoline demand (only 1/3 of our total petroleum use, so the decline is really .5%) is a pittance compared to the ongoing decline in the Mexican oilfields (10%), our 3nd largest supplier of petroleum (after ourselves and Canada).

[DantesPeak]

No downturn in oil demand, says the EIA:

$this->bbcode_second_pass_quote('', 'U')S '07 Oil Use Flat On Yr; Gasoline, Distillate Records

DOW JONES NEWSWIRES
March 3, 2008 11:04 a.m.

By David Bird

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--U.S. oil demand in 2007 averaged 20.698 million barrels a day, virtually unchanged from a year earlier, revised data released Monday by the Energy Information Administration show.

Demand for gasoline and distillate fuel (heating oil/diesel) rose fractionally, but enough to set annual records.

The revised figures show total U.S. oil use ticked up by 0.05% from a year earlier, a rise of just 11,000 barrels a day. Earlier estimates put the 2007 gain at 0.2%, or 42,000 barrels a day.

The flat year-to-year demand picture follows a 115,000-barrels-a-day, or 0.6%, decline in 2006. The steady 2007 demand came despite the highest-ever oil prices paid by U.S. refineries.

Separately, EIA said refiners paid a record average of $67.93 a barrel for crude oil in 2007, up 12.8% from a year earlier.

Demand for gasoline, the most widely used petroleum product, averaged 9.29 million barrels a day, up 0.4%, or 37,000 barrels a day, on a year earlier.

Gasoline's small gain still marked the 16th straight year for record gasoline demand, dating back to 1992, but it was the smallest rise in the period.

[pup55]

$this->bbcode_second_pass_quote('', 'N')ov 24, 2006 9320
Dec 01, 2006 9477
Dec 08, 2006 9394
Dec 15, 2006 9491
Dec 22, 2006 9229
Dec 29, 2006 9247
Jan 05, 2007 9201
Jan 12, 2007 9060
Jan 19, 2007 9008
Jan 26, 2007 9090
Feb 02, 2007 9136
Feb 09, 2007 9061
Feb 16, 2007 9198

[Tyler_JC]

Refiners paid an average of $68 a barrel in 2007.

They will pay at least an average of $98 a barrel in 2008.

That translates into higher gasoline prices and the possibility of significant demand destruction.

[pup55]

On second thought, let us not let this sleeping dog lie:

$this->bbcode_second_pass_quote('', '
')
To: tbarmann@projo.com
From: pup55

Dear Mr. Barmann:

We have read your recent article on the "decline" in gasoline consumption per the following link:

http://www.projo.com/business/content/b ... 444b3.html

and found it to be factually inaccurate, and not particularly descriptive of the current situation:
The correct data for gasoline consumption in the US comes from the Weekly Petroleum Status Report:

http://www.eia.doe.gov/oil_gas/petroleu ... /wpsr.html

and is as follows:

20006-2007: average: 9,216 tbpd
2007-2008: average: 9168 tbpd
"decline" 0.5%
student-t probability for this set of data is .16, the difference is not statistically significant.

The article might have pointed out that this occurred despite the 80-cent increase in wholesale price during that time. A more accurate headline would have been "demand little changed despite big price increase".

We are currently discussing this article in the following forum thread:

http://peakoil.com/fortopic37359.html

and would be delighted if you would participate in the conversation if you have any comments. Peakoil.com is a discussion forum on the topic of hydrocarbon depletion, and has over 50,000 discrete visitors per month.

pup55

[KillTheHumans]

$this->bbcode_second_pass_quote('pstarr', 'Y')ou do realize this is all incomprehensible mathematic nonsense?

[KillTheHumans]

$this->bbcode_second_pass_quote('pup55', '
')
Average 9216

average 9168

"decline": 0.52%
ttest probability .16 not statistically significant.

(yawn)