[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', 'I') couldn't get historic figures for 2009 (since we're in 2009). The STEO historical estimates show consumption almost flat, in 2008, compared with 2007. OECD stocks declined in 2008, compared to 2007. The projections for 2009 have consumption down 1.17 mbpd and OECD stocks down, not up. Could you provide a link to what you were looking at?

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', 'I')t isn't just one month, barring December, all of the past nine months have seen similar or significantly lower levels of consumption compared to the same time during the previous year. December could have been the beginning of a trend in increased consumption, which is why oil prices poked above $40/bbl IMO, but as we can see from the January data it looks like groups were just stocking up, since the increase did not hold. Obviously this trend could change and consumption could shoot back up, but we have three quarters of a year of similar or reduced consumption barring one month, so as trends go this is seen as a steep decline. Granted, it isn't in the sense that it isn't whatever percentage (5, 10, 25, 50, etc) we feel is steep, but it is steep when looking at the history of oil consumption. Given over two decades of rising oil consumption, any drop is probably going to be seen as steep.

[TonyPrep]

I don't think there is much evidence that OPEC cuts have been very large. The IEA's OMR shows only a .9 mbpd cut between the 3rd and 4th quarters, the EIA estimate is about 1 mbpd cut in production. Certainly not enough to, on it's own, enable consumption to be above production. It would have been comfortably above production, even without any decline in OPEC production, at least according to the EIA estimates.

Consumption, in 2008, was only slightly below 2007 (by .37 mbpd) and still comfortably above 2006 consumption (by .57 mbpd), according to the IEA. According to the EIA, 2008 consumption was virtually unchanged from 2007 and almost 1 mbpd above 2006.

What I'm trying to point out is the consumption has not seen a huge decline, contrary to what OPEC officials would have us believe and what article after article suggest. At least there is no data to support such a view. There has been consumption decline but it does not appear to be very large, yet. I chose the months Oct-Jan because the recession was worsening during that time - US GDP, for example, shrank 6.2% in the fourth quarter. But consumption hardly declined at all.

Oil prices have climbed recently, despite continuing economic and equity market woes. Perhaps some sort of economic reality is beginning to dawn.