Just a minor point, the great depression didn't have much impact on the Soviet Union, and Japan was able to recover quite quickly in the early 30s because of its invasions and subsequent "access" to raw materials.

Read that story carefully. They are saying "early production" will start.

BP itself merely repeated that they expect production to begin before the end of 2008. Peak production, whenever it gets reached, will be 250,000 barrels per day.

There's been a tremendous blitz of stories in the msm about new production coming online, new promises of production, new projections of falling demand, new meetings, etc. It's been going on all week, and it's a deliberate propaganda response to the sharp rise in prices last Friday.

Essentially, they're trying to keep speculators and investors out of the oil market to keep prices as stable as possible in the face of huge inventory draws.

But big talk virtually always is a bluff.

If what they were saying was true, they wouldn't need to do so much frantic propaganda. We would see increases in inventory, and the price would fall. They are doing everything they possibly can to keep the market in doubt.

That is a tell, elwoodelmore.

Louisiana sweet's just under $140. But they're still losing to Tapis.

This makes me think that we are about to finally tap the Ghawar-sized field sitting under Detroit. I don't know why we had to be dragged kicking and screaming, but we seem to like it that way. Downthread, I put up some numbers for per capita demand. If we lowered to level of Sweden or Japan, it would approximately equal the flow of Ghawar.

This seems weird as just last week I "thought" that I had read that year-to-date export declines from Mexico were running around -17% which is about half what you currently site. And of course, part of the stuff... 300,000 bpd... from Venezuela is headed to China where they need the oil to continue to make crap for us to buy.

Byron

a few hundred barrels per day would make a difference, assuming that it won't get sucked up by depletion. You can explain most of the oil picture by looking at the 20 top countries sorted by change in 2007.

Source: BP for 2006-7, IEA for 2008, Orange=no data, used 2007 production, Green = increasing, Pink = decreasing
Azerbaijan should increase to from 868k to 1.3m per day by 2009 once the ACG ramps up and the BTC pipeline is running at full capacity.

The flip side of coasting on inventories is that it reduces demand pressures in the market and, hopefully, moderates the price down the line. I'm not saying that it's going to be successful, but the alternative is to "panic" buy crude in the markets, thereby driving the price up further - and I suspect that US refiners are a tad cannier than that; and, crucially, they have much greater visibility regarding their forward crude supplies than we do, and they're more than capable of juggling inventory in such a way as to minimise their input costs as much as possible in the hope that time will work in their favour, as current price levels work to kill off demand elsewhere.

It's worth noting that whilst the crude inventory has declined, refined product stocks are either holding steady ( ie gasoline, jet fuel ) or building ( distillates, propane ), so the situation remains ambiguous.

But continually decreasing inventories tend to drive the price up further. I really can't see the logic in such a deliberate "game of chicken".
But from the standpoint of an individual refiner, who thinks he is too small to effect the overall market, it might make sense. This presuposes he thinks there is at least a fifty percent chance of price moderation.