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44 comments on A Few Thoughts on US Petroleum Demand, Inventories, and Prices

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pepper2000 on February 26, 2009 - 5:11pm Permalink | Subthread | Comments top

Thanks for the data. I'll head off the quibble that I know is coming: "usage" might be a more appropriate word than "demand", since demand is generally thought of a function of price. The fact that usage is down so much, even with prices down too, is actually even more remarkable than what is indicated by the charts. It suggests to me that the state of the economy has much more impact on usage that does the price.

One can imagine that if the economy shows signs of a comeback, prices will make a comeback in a major way.

Do you think it is possible that the US will never annually use more petroleum again than in 2006 and 2007? I think that it is quite possible.

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Russ on February 26, 2009 - 5:29pm Permalink | Subthread | Parent | Comments top

Do you think it is possible that the US will never annually use more petroleum again than in 2006 and 2007? I think that it is quite possible.

If (1) recovering US demand coincides with the effect of OPEC production cuts (the markets finally seem to be taking the idea seriously, especially now that this 4.3 MPD figure looks like it's really going to happen), such that prices recover enough to keep demand lower than the levels of recent years, and (2) that condition holds while (A)projects are being mothballed and investments cancelled, (B) China and others lock up bilateral non-market deals with producers, and (C) all the while depletion from existing fields of course continues, I guess it's possible there will never again come a time where (1)America demands as much oil as in 2006-7, and (2) that much oil is actually available to it.

In that case, we would already have seen American Peak consumption.

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erichacker on February 26, 2009 - 5:39pm Permalink | Subthread | Parent | Comments top

Do you think it is possible that the US will never annually use more petroleum again than in 2006 and 2007? I think that it is quite possible.

I think that is a very safe bet. For usage to go back up to 2006/2007 levels one needs the economy to recover enough to allow for discretionary driving on top of full commuting driving and for the price to stay below 2007 levels.

The economy does not appear headed for a recovery soon. By the time it does recover, the price of oil will be much higher due to the supply dropping off.

Does US consumption include how much it takes to support our soldiers in Iraq and Afghanistan? I think I recall hearing that it takes on the order of 16 gallons a day per soldier.

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Luke H on February 27, 2009 - 4:11pm Permalink | Subthread | Parent | Comments top

That is less than 100,000 barrels a day, we barely acknowledge such a small figure.

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poobah_1 on February 26, 2009 - 8:28pm Permalink | Subthread | Parent | Comments top

The demand number they use is weird. Usage is probably a better word. I think the EIA calls it Products Supplied. Implied demand is a bit different horse.

Excellent question if we ask will the US ever use more than we did in 2006/07. Sobering really. If the answer is no, we will never grow GDP again. Ever.

I think that may be a bit extreme. The Kingdom will have 3-5 MMdb of spare capacity when the normal cycle turns in late 2010 so that will allow hyper-charged grown until maybe 2012. I think oil might be $175 a barrell then and Pres. Obama will be on his way out and right wing republican will win promising to 'guarantee American access to oil' using 'any means necessary'. Then we fight China for the last drops.

Well, I got off on a tangent. for a first post that was rather depressing.

PooBah

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Gail the Actuary on February 26, 2009 - 10:01pm Permalink | Subthread | Parent | Comments top

I agree--demand is not a very good word for it. Product supplied really describes the situation better.

Glad to have you as a commenter!

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Darwinian on February 27, 2009 - 9:46am Permalink | Subthread | Parent | Comments top

The demand number they use is weird. Usage is probably a better word. I think the EIA calls it Products Supplied. Implied demand is a bit different horse.

Naw, they just use different words in different places but the figures are exactly the same. They use the word Demand here.
http://www.eia.doe.gov/emeu/ipsr/t17.xls

And they use the words Petroleum Products Supplied here.
(Excel) http://tonto.eia.doe.gov/merquery/mer_data.asp?table=T03.01
(PDF) http://www.eia.doe.gov/emeu/mer/pdf/pages/sec3_3.pdf

But if you check the numbers, they are exactly the same. The latter numbers however from their Monthly Energy Review are always two to three months ahead of the former numbers from their International Petroleum Monthly

Ron

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44 comments on A Few Thoughts on US Petroleum Demand, Inventories, and Prices

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