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Thursday, May 04, 2006

Oil World Supply

SC&A pointed out in the comments that based on the numbers presented by OMR, from 2002-2005 world oil demand grew less than 10 percent. True.

This table from OMR gives the figures for world oil supply 2002-2005. In 2002 world supply was 76.9, and by 2005 it had risen to 84.1. World oil demand rose from 77.8 in 2002 to 83.6 in 2005. In other words, supply is growing faster than demand as adjusted by high fuel prices. Oil companies know this, and are worried about increasing supply too quickly.

You can look at all the supply/demand tables at OMR from this page. They are available by region and in some cases, country.

In a situation in which supply is rising faster than demand, you can still expect higher oil prices as companies have to invest more by opening new resources and pumping from more costly fields in order to meet the increased demand. Yet this does not account for the huge rise in cost. Oil prices ought to be around $50-55 per barrel.

What's driving the steep run-up in costs is first international politics, and second our own internal domestic political insanity. SC&A. Edgy Adji. Oil Demand. Everyone is trying to spin this to fit their own agenda. Almost everyone yapping about the situation is ignoring reality. Until we can make our minds grasp the facts we will not have a chance of addressing the real problem.

Good post- as usual. In fact, given that western consumption is barely rising, I'd venture to say oil prices ought to be at 45-50.

The fact is, the high prices serve the dems and the GOP. The dems get to blame Bush and the GOP is hoping to push through ANWAR.

And NOBODY is talking oil shale and Green River Basin.

One more thing. Thank you for writing about this.

It's important.
Yes, I would say that every species of politician is showing that stupidity and self-serving behavior is not confined to a single political affiliation.

So many groups are trying to spin this for their own benefit. In the meantime the public welfare is being ignored.

One encouraging note is the anger that the senators seem to be encountering (I've read several Republican senators commenting on it). It seems as if the public is wiser than the pundits.
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