Someone can correct me if my figures are wrong but...

1. We have roughly 1mbpd of lost oil due to Gulf shut-in.
   
2. Are we not drawing roughly several hundred thousand bpd from the SPR?
   
3. Are we not also receiving roughly more than 1mbpd "loan" from Europe? (I think this loan is about to end.)

If the above scenario is right, then that would explain the temporary downward price movement as well as building stocks. (That scenario explains the situation no matter what the numbers are if they add up to more than the 1mbpd shut-in for the Gulf.)

Someone with better current numbers might be able to shed light on that.

Imports are still up - see the graphs in the post last Thursday.

Our last Reserves Report incl these stats that may assist rationalization of the conflicting data out there:  July/Aug/Sept global extraction was 84.3-mbd/84.7/83.8 and speculation within the sector resulted in illegitamate demand that resulted eventually in stock builds of 2.5-mbd in 2005Q2 & 1.9-mbd in 2005Q3.  Heating oil and gasoline are back to Spring 2005 prices.  Similarly the nat'l gas spike is falling like a rock.  We are raising our USA working gas trough in March from 950-Bcf to 1000-Bcf even tho many pundits are still in the 300-450 area.  They are plainly wrong no matter how bad they feel the  winter will be.

Global production continued its pace of new monthly records in 2005.

Despite the new round of apocalypse posts at TOD surrounding the IEA Outlook, the concensus of Peak Oil and Depletion jars one back to reality... http://trendlines.ca/economic.htm#Scenarios

Similarly the graphs of oil/gas/gasoline at http://trendlines.ca/economic.htm#USAReserves illustrate that present stocks are ample and our problems stem from refinery capacity and distribution, not secular supply, which is clearly in growth mode.

Could someone please try explaining to me the published statements/comments from talking heads that the reason for the decrease in the price of gas/crude is due to a decline in demand.

When I look at the current This Week in Petroleum - Gasoline report and particularly the demand section, the four week average is now almost the same as the four week average for last year.  Also, the weekly demand amount ONCE AGAIN is greater than a year ago.

Realize that the "demand" in these charts would be better described as "consumption". It's the amount of gas actually shipped for distribution.

You're right that the amount consumed is, for the second week in a row, somewhat higher than a year ago. This is despite the fact that gas prices are still higher than a year ago (although down a great deal from post-Katrina). Higher consumption with higher prices means that demand is HIGHER now than it was a year ago.

Your "talking heads" are to some extent a few weeks behind the times. Last month, consumption was lower than a year ago, so they had a point back then.

So why are gas prices falling? Well, obviously, it's supply and demand. Demand is up, so it must be that supply is up even more.

What I think is happening is that we took a bunch of measures post-Katrina and -Rita to try to boost gasoline supply. Regulations were relaxed to let the refineries increase production, we released oil from the SPR, and we borrowed oil and gasoline from Europe. But things take time, and there's always a lag from when a policy is initiated until when its effects are held. We are still experiencing the effects of these production boosts, even though we really don't need them so much any more. Supply is higher than it needs to be, and that is driving down gas prices.