Drumbeat: August 2, 2013

From The Oil Drum - Discussions about Energy and Our Future
August 2, 2013 - 9:45am

The future of oil: Yesterday’s fuel - The world’s thirst for oil could be nearing a peak. That is bad news for producers, excellent for everyone else With billions of Chinese and Indians growing richer and itching to get behind the wheel of a car, the big oil companies, the International Energy Agency (IEA) and America’s Energy Information Administration all predict that demand will keep on rising. One of the oil giants, Britain’s BP, reckons it will grow from 89m b/d now to 104m b/d by 2030. We believe that they are wrong, and that oil is close to a peak. This is not the “peak oil” widely discussed several years ago, when several theorists, who have since gone strangely quiet, reckoned that supply would flatten and then fall. We believe that demand, not supply, could decline. In the rich world oil demand has already peaked: it has fallen since 2005. Even allowing for all those new drivers in Beijing and Delhi, two revolutions in technology will dampen the world’s thirst for the black stuff. China's Crude Conundrum The tremendous growth of the Chinese economy over the past two decades has vaulted China to second place behind the United States in oil consumption. But China's ability to continue its current economic growth trajectory is increasingly doubtful, adding to the uncertainty around global demand for many of the commodities the country has voraciously consumed, including oil. WTI Gains for Second Day as U.S. Manufacturing Strengthen West Texas Intermediate crude headed for a weekly gain before U.S. employment data that may add to evidence the economic recovery is on track. Brent exceeded $110 for the first time since April, before paring its advance. Futures rose as much as 0.9 percent, bringing their gain this week to 3.2 percent. Government data today may show employers added jobs in July at about the same pace as in the previous month, trimming the unemployment rate. The Institute for Supply Management’s U.S. factory index expanded at the fastest rate in two years, the Tempe, Arizona-based group said yesterday. Libya’s head of oil security quit as labor protests shut export terminals in the country. “The string of macro indicators from the U.S. is increasing optimism before the employment figures today,” said Thina Saltvedt, an analyst at Nordea Bank AG in Oslo. “Oil demand is picking up in the U.S., so that’s a good sign.” Natural Gas Drops to 5-Month Low on Above-Forecast Supply Gain Natural gas futures slid to the lowest price in more than five months in New York after U.S. stockpiles increased more than forecast last week. Gas dropped 1.7 percent after the Energy Information Administration said supplies rose 59 billion cubic feet in the week ended July 26 to 2.845 trillion. Analyst estimates compiled by Bloomberg showed a gain of 56 billion. Commodity Weather Group LLC said the weather may be mostly cooler than average in the eastern two-thirds of the U.S. through Aug. 15. Iran, Russia, Qatar agreed to prevent gas prices from falling The Gas troika of Iran, Russia and Qatar have agreed on stabilizing the gas prices, and preventing them from falling, Mehr news agency quoted Iranian Deputy Oil minister Javad Owji as saying. According to Mehr, the troika achieved the agreement during the second summit of the Gas Exporting Countries Forum (GECF) which held in Moscow in July. Oil Prices and the Ship of Sad Fools History shows, the sad fool is he or she who doesn't understand that fundamentals are not driving crude oil's long-term price trends. What does drive them is the collective psychology of investors, which unfolds in observable Elliott wave patterns on crude oil's price charts. What is "Business as Usual" in terms of now to 2030 ? 2050 ? Gail is wrong about how much oil, gas and coal that can be obtained and the price of it. The amount of resources will still go up for several decades. Russia's July oil output falls, seasonal factors blamed MOSCOW (Reuters) - Oil output from Russia, the world's biggest producer, fell 1 percent in July from the month before, hit by lower production at Gazprom and a drop in output from projects with foreign partners, data from the Energy Ministry showed. The decline could be a worrying sign for Russia, as it needs to grow production to maintain its share of supplies to Europe and ramp up output to China. Gazprom CEO: Shale gas not Russia's concern this century While the booming ‘shale revolution’ is being increasingly

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