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Bill USA

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Member since: Wed Mar 3, 2010, 05:25 PM
Number of posts: 6,436

About Me

Quotes I like: "Prediction is very difficult, especially concerning the future." "There are some things so serious that you have to laugh at them. __ Niels Bohr Given his contribution to the establishment of quantum mechanics, I guess it's not surprising he had such a quirky of sense of humor. ......................."Deliberate misinterpretation and misrepresentation of another's position is a basic technique of (dis)information processing" __ I said that

Journal Archives

Crude Oil prices drop ~40% as World Production increases 1% and inventories increased 0.8%..Whaat???

The International Energy Agency indicates that World Crude Oil production has gone up almost 1% from the Second Quarter of 2014 (92.77 MB/D) to the Third Quarter of 2014 (93.62 MB/d). https://www.iea.org/oilmarketreport/omrpublic/

the Energy Information Administration indicates in their Short-Term Energy Outlook - Nov 2014 (click on "Table 3a. International Petroleum and Other Liquids Production, Consumption, and Inventories" - or - "All Tables" at the top of the page) that:

End-of-period Inventories (million barrels) for OECD Commercial Inventory was at 2,661 for Nov 2014 (estimated) and at
2,640 as of June 2014 for an increase of .8%.

Yet the price for Crude Oil (Brent) has dropped about 39% since end of 19 June of this year. (19 June 2014: $115.14 to $70.67 (note Bloomberg's udates oil prices continuously so this price can change)

So apparently, this ~40% price drop is due to anticipating the impact of OPEC keeping production at the same levels while World oil demand is declining. This shows the impact of traders/speculators in Oil - or in any other commodity (like food crops) - on the price of that commodity. At this point in time, World Crude Oil Production has risen about 1% over what it was in the second Quarter and Crude Inventory for the OECD countries has risen over the same time period a whole 0.8%!

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