Global demand for oil to plummet

[RamboLiberal]

Source: Financial Times

Global oil demand will collapse next year and commodities will not return to the highs they reached this summer in the foreseeable future, two authoritative reports said on Tuesday as they forecast a long and painful worldwide recession.

The stark conclusions came as the World Bank’s chief economist predicted that the world faced “the worst recession since the Great Depression”.

The US energy department said global oil demand will fall this year and next, marking the first two consecutive years’ decline in 30 years.

“The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices,” it said, forecasting that demand would drop 50,000 barrels a day this year and a hefty 450,000 b/d in 2009. US oil demand will drop next year to the lowest level in 11 years.

Meanwhile, the World Bank’s Global Economic Prospects report said the commodities boom of the past five years – which drove up prices 130 per cent – had “come to an end”.



Read more: http://www.ft.com/cms/s/0/bcda848c-c62a-11dd-a741-000077b07658.html

[truthisfreedom]

1. Isn't that special.

Just in time for the holidays!

[Agent William]

2. Yes but will China's demand fall aswell

I personally don't know. Thats good to hear that we are cutting down on our consumption.

[RamboLiberal]

4. Short term at least China's demand should be falling

Reporting from Shanghai -- China's trading activity collapsed last month, as exports shrank for the first time in more than seven years and imports plunged, the government reported today.

The 2.2% year-over-year decline in November exports contrasted with a 19.2% increase in October, underscoring the rapidly deteriorating conditions in China's economy.

The falloff in exports was the first since June 2001 and worse than analysts had expected. It cast further doubts on whether China's economy could grow at a pace that would create enough jobs at home or provide a significant boost to a slumping global economy.

"It basically reflects what you're seeing on the ground -- factories are closing," said Andy Xie, an independent economist in Shanghai.

"It's very grim," he added. "You can bet the next few months are going to be worse."

http://www.latimes.com/business/la-fi-china-trade11-2008dec11,0,2515641.story

[Beartracks]

8. But isn't that like seeing a drunk...

... get kicked out of a bar after last call, and remarking that he's cutting down on his drinking now? :silly:

[bemildred]

3. A couple of percent drop in demand is not "plummet".

A 20-30% drop would be "plummet". Just saying.

[Xipe Totec]

5. Astute observation n/t

[bemildred]

6. Grade school math can take you a long way.

:hi:

[Xipe Totec]

7. ...

:evilgrin:

[Third Doctor]

9. It's a miracle

I never thought I would see $1.50 gas again

[Xipe Totec]

10. The miracle is

we still have gas.

Someday, we will look back and say:

"These idiots used to burn the stuff for energy"

(I hope I will be around to hear it).

[AllentownJake]

11. We have plenty of oil

for at least another 100 years there are offshore oil fields with rights to drill that the companies aren't touching that have additional oil. If there was a shortage the rigs would have been rushing there...however oil is an inefficient and dirty energy source and we need to phase ourselves off it for enviromental reasons.

I never once waited in line for gas this summer....that's how I knew other forces were at work with this.

[Xipe Totec]

13. It is still idiotic to burn it.

The number of products that can be produced from oil in unfathomable.

[AllentownJake]

14. Phasing yourself off an energy source takes time

and we should do it.

However, I have a strong feeling the prices over the summer were orchestrated. I've never heard of a commodity jumping in price like that and than falling so quickly without there being people manipulating the price somehow without there being shortages. If there was a demand issue the price would have increased at a slower rate as demand increased. The rate oil was increasing this summer was unrealistic and I knew it this summer because I never once waited in line for gas or heard of people purchasing less gasoline (kind of a fixxed cost you need to get to work).

[Xipe Totec]

15. I'm just relating a conversation I had with my Org Chem prof

30 years ago.

I think, that should have been enough time, don't you?

[AllentownJake]

17. I'm saying if we do everything we can right now

It will be 10 years.

I drive a car. I have a decent job but don't plan on buying another one for 5 years. When I do buy one it will be used because I refuse to buy an asset that depreciates 30% the minute I take possesion of it. So until a reasonable and affordable alternative is made available...I and most of everyone else in this country have no choice.

[Xipe Totec]

18. I'm saying there are better uses for oil that burning it,

and we will regret it when it is gone.

There are simpler hydrocarbons we can use for energy than petroleum, alcohol, for example.

We will then realize how difficult it is to create plastics starting from raw carbon, hydrogen, oxygen and nitrogen.

The net energy required to produce plastics from basic materials will far outweigh the energy we ever produced from burning the raw petroleum to begin with.

[Psephos]

20. You should look up the tulip bubble sometime n/t

[AllentownJake]

22. 1640's Holland

well aware of it...the price of oil never got that bad...but this summer was pretty ridiculous.

[irislake]

32. Many of which are bad for us

such as plastics which are feminizing males and causing cancers and other crap. More harm than good.

[Xipe Totec]

33. But, at least, you can avoid them if you want

But when you burn them, everybody breathes them, whether they want to or not.

[neverforget]

24. So there is 2.9 trillion barrels of oil offshore or 730 billion barrels?

80 million barrels per day X 365 days/year X 100 years = 2,920,000,000,000 world consumption. Or do you mean US consumption? 20,000,000/day X 365 days X 100 years = 730,000,000,000.

These consumption rates assume no growth per year. Saudi Arabia says they have 260 billion barrels as a reserve and they have said that for about 20 or so years. They pump about 9-10 million barrels per day but their reserves never deplete. I wish my checking account worked like that.

[AllentownJake]

26. There was no shortage crisis this year

the oil traders were allowed by the Bush Administration to make oil prices blow up.

I'm for alternative energy however there was something very fishy when a commodity jumps in price 2 fold in a 3 month period than falls 3 fold in a 4 month period after the peak.

[lapfog_1]

25. But the point is...

you still won't be able to afford it. Where the "you" part is generic you.

[Wednesdays]

28. The problem now is, coming up with that $1.50

:(

[AllentownJake]

12. It's at the price it should have been all along

Ask yourself this...at anytime this summer did you wait in line for gas?

[bemildred]

23. I said nothing about the price, what it should be, what it was, nothing.

I said the demand drop described in the OP does not fit the description "plummet".

[happyslug]

29. The 5.5% drop in US consumption was enough to drop prices from $4 to $1.79 a gallon

Thus 5.5% was a "Plummet". This is NOT good, hopefully Obama will accept this drop in price as a Problem and increase gasoline taxes to get the price up to $4 a gallon again. We need $4 a gallon, it is the only way to can cut back on oil usage, all the other efforts have failed (I.e. the Corporate Fleet average rule, ineffective till gasoline went to $4 a gallon). The US needs to cut back on imported oil and the best way to to cut back on usage, and that requires oil to be priced higher then it is and will be if oil consumption world wide does not Increase.

The US has a window of opportunity, where we can get the excess money from $4 a gallon gasoline (via taxes on gasoline while oil is cheap) and use it to prepare the US for a time when oil will return to $4 a gallon (it is coming, even Saudi Arabia is believed to have peaked in production). As long as production exceed use, prices will remain low (And OPEC will do what it did in the 1980s, again show it can NOT keep prices up, OPEC never has except when world wide oil consumption exceeded world wide production capability). High Gasoline prices are coming, through according to this report 2-3 year away at best. It is better for the US to follow the example of Europe and use high gasoline prices to discourage gasoline consumption thus keeping the price of oil low. Yes, it sounds weird, but the best way to keep oil prices low is high taxation to discourage use. The higher the tax the less oil that is used and thus the more oil available for use (and production stays higher then consumption so oil prices stays low except for the taxes).

I fully expect a tax hike of $2 a gallon to be unpopular, but the sooner we start to view it as the best way to handle both the current situation AND the coming problem of peak oil (It is coming) the better we will be able to handle both problems.

[ohio2007]

16. so screaming " peak oil" will be a way to scare it up again ?

Or

a Saudi oil terminal get terminated......

[Psephos]

19. Iran likes to stir up the pot to raise oil prices...prolly come from them

Cuz they're in a world of hurt right now with the plunge in oil revenue. The natives are getting restless.

[happyslug]

30. But Iran gets its gasoline from the refineries elsewhere in the Gulf

The quickest way to Iran to increase the price of oil would be to destroy those refineries, thus dropping oil production. The problem is Iran IMPORTS much of its Gasoline, so a destruction of those refineries will do it more harm the good in the form of higher oil prices. Iran is caught in a vice, they best action would be to cut production to increase price (and maybe destroy Iraqi oil via Iran's allies in Iraq). Anything else will cost Iran more then it will gain, thus except for Iraq, Iran will do nothing, for it can't do anything. It is up to the other OPEC Members to cut back production and those bunch of liars will say they will cut back production and then increase production to get more money for whatever oil their produced. This is what happened in the 1980s and it is what happening today.

[eilen]

21. For a while all it took was threat of a hurricane,

that may happen near ummm, water... located near a port a short distance from a refinery.... or they have to close the refinery to do maintenance.... bullshit bullshit turn around and let me pick your other pocket (you drink coffee? eat bread? eat rice? drink milk?--how about water....)--there is an endless supply of asshattery excuses to explain away a large increase in price when in all actuality it is a gamed stunt. Remember Hillary's cattle futures?

[AllentownJake]

27. Bingo!

[BootinUp]

31. Or someone in Israel going

booga! booga!


That would shoot the price up too.