Peak oil review – Aug 17 by Tom Whipple

1. Production and prices

2. Is China really Recovering?

3. Mexico

4. Briefs

1. Production and prices

Since the beginning of August oil has hovered around $70 a barrel as the markets tried to decide whether the prospects for an imminent economic rebound trumped weak global demand. On Friday the pattern was broken when new reports showed weaker-than-expected US retail sales and a drop in consumer confidence. The equity markets and oil prices fell with oil closing the week at $67.51– the lowest since July 30th. As we move towards the fall, pessimism about the immediate future of oil prices seems to be gaining the upper hand. […]

2. Is China really Recovering?

All week there was a steady stream of new reports from China: — oil imports jumped 18 percent year on year; iron ore purchases rose 5 percent month over month; industrial output up by 10.8 percent in July; imports and exports continue falling; and Beijing to triple use of renewable energy by 2010. […]

3. Mexico

The rapid drop in Mexican oil production is starting to have effects across the country. With the possibility that production from Cantarell could fall as low as 400,000 b/d by the end of the year, from a high of over 2 million b/d five years ago, the government is facing serious fiscal problems. Finance Minister Carstens told the Mexican Congress last week that oil production may fall by 4.9 percent next year and the government is preparing to raise taxes to cover a $23 billion hole in the budget from lost oil revenues. Oil revenue funds 38 percent of the government