Plenty of oil sloshing around.....

[pscot]

http://www.marketwatch.com/story/what-an-obscure-dutch-firm-says-about-oil-market-2009-11-12

Vopak is the world's largest independent tank terminal operator (and reports that) demand for storing oil is strong.
A major reason to store, rather than sell, oil is if there aren't buyers for it. (Another would be a bet that prices in the future will grow significantly, but the futures complex at the moment is pricing in a 7% rise in 12 months and a 16% rise over five years -- hardly an irresistible siren song.)
----
...A.P. Moller-Maersk...the shipping giant, said in its nine-month report on Thursday: "There are no short-term prospects of higher demand for oil and gas transports." About the only good news they reported in the third quarter from that division came as vessels were increasingly used as offshore storage facilities.

-- the market is very well supplied....similarly, while the International Energy Agency on Thursday hiked its 2009 and 2010 oil demand outlook, it pointed out that demand for gas/oil used in railways and trucks is still pretty weak...And, as the IEA also pointed out, the current price itself could derail recovery. What it all suggests is that while demand for oil is certainly on the upswing, fundamentals aren't entirely behind the more than doubling in oil from February lows.

Speculators getting ahead of themselves? Nah, it couldn't be.

In a market where oil reached as high as $147 a barrel, predicting prices is a fool's game. But know this -- there's plenty of oil sloshing around without a home.

-- Steve Goldstein

[Andy823]

1. something needs to be done about this

Congress talked about putting a stop to the speculation factor in oil prices last year, but it didn't go anywhere. I wrote my congress woman, Patty Murray who sponsored the bill last year and all she said was if Harry Reid put it back on the floor she would vote for it! If they wait till prices get up to almost $5.00 a gallon for gas it will be to late. Everyone needs to write their congress person and put pressure on them to do something about this before we see price go through the roof again. Greed is why the price is up, pure GREED!

[Terry in Austin]

2. The market is very well supplied, tra-la

Well supplied for the moment, perhaps, but trying to make it sound like "there's plenty of oil" is misleading at best. It might be plenty for you and me, but relative to the world's 85 million barrel a day habit, it's barely a drop in the bucket.

Basically, the oil sitting in those few storage tanks represents the bulk of the world's spare capacity. This is new. And it's not good.

That same IEA now says worldwide production is declining at 6.7% per year. These helpful diplomats explain the stat this way: it means we need to add the equivalent of a whole new Saudi Arabia every five years just to stay even with current demand. Which is a diplomatic way of saying "Ain't gonna happen."

There may be plenty of oil for November, 2009, but articles like this do a disservice when they try to give the impression that our oil future is fine and dandy.

[pscot]

3. I don't think the article was meant

to suggest anything about our oil future. I saw it as an attempt to understand what's goong on in the oil markets right now. Peak oil is still with us. How it plays out, day to day, is an unfolding mystery.