There’s an interesting story in the Wall Street Journal today …Oil Exporters Are Unable to Keep Up With Demand Fresh
data from the U.S. Department of Energy show the amount of petroleum
products shipped by the world’s top oil exporters fell 2.5% last year,
despite a 57% increase in prices, a trend that appears to be holding true this year as well. In
all, according to the Energy Department figures, net exports by the
world’s top 15 suppliers, which account for 45% of all production, fell
by nearly a million barrels to 38.7 million barrels a day last year.
The drop would have been steeper if not for heightened output in
less-developed countries such as Angola and Libya, whose economies have
yet to become big energy consumers.XX This story reinforces a point I made in my peak oil report “Running on Fumes.” In fact, I listed it as “Force #5 — Domestic Need is Squeezing OPEC Oil Exports.”
So if you bought my report, you were months ahead of the Wall Street
Journal in knowing that domestic demand is rising so fast in the oil
producing nations that their exports are going to go down, even if they
pump more.Meanwhile,
about 2 billion people in China, India and other emerging markets are
lined up to buy cars over the next 10 years. Now, I don’t think they’ll
all buy cars — I think the crisis we’re rushing into will prevent that
– but it shows steadily growing demand that should squeeze prices
much, much higher.Next, let’s look at this great chart that was on TheOilDrum this morning …And this brings me to my point. I
saw yet another talking head on CNBC saying that if only Congress would
let us drill everywhere and increase domestic supply, we could solve
this problem.They. Just. Don’t. Get. It.What we need to solve is not supply but demand.
Hell, if we have more oil, and don’t stop our demand growth, we’ll just
use it up and be in the same leaky boat five years out. We need to
change how America uses oil and use a lot less of it.If
we can seriously cut back on oil use — conserve, conserve, conserve –
then I’ll be happy to talk about drilling off the Atlantic shelf or
whereever you want. My guess is, if we could cut US oil use by a third,
we might be able to leave the decision on drilling in ANWR to our kids.That said, according to the US Energy Information Administration, gasoline demand has fallen 0.6% so far in 2008, as consumers tighten their belts.  If there was a lot less driving over the Memorial Day holiday — and we’ll find that out soon — we could see the beginning of the short-term pullback in oil prices that I’ve been looking for since oil hit my short-term target of $127 a barrel.

Last 5 posts by Sean Brodrick

• The Golden Phoenix - February 25th, 2009
• Blessing in Disguise - February 4th, 2009
• What I'm Reading Today - January 7th, 2009
• Gold and Oil Short-Term Trends - January 7th, 2009
• Is Gold Poised for a Pullback? - January 6th, 2009