[Peakoil-announce] Gasoline stockpiles falling dramatically

[Alex P]

Forwarded from the ROEOZ list.

More evidence that the Peak has happened, OECD nations have drawn down 
nearly 1 million barrels per day from stockpiles during the first quarter 
just to keep prices stable. World production is approx 85 millions barrels 
per day. Demand is outstripping supply. And this drawn-down is set to grow 
to 1.6 million barrels per day by the end of the year. But stockpiles are 
finite of course.

That means prices are going to go way up within months.

Alex
O4O4873828

ACT Peak Oil
http://act-peakoil.org


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from ASPO-USA's Peak Oil Review, 14 May 2007

Gasoline stockpiles remain a serious problem 

The EIA reported last Wednesday that US gasoline stocks rose by 400,000 
barrels the previous week, the first increase in 13 weeks. A closer 
inspection of the report, however, shows that the increase was due to a 1.1 
million barrel increase in inventories on the West Coast, not across the 
country. The news caused gasoline futures to jump 9.5 cents to $2.326 a 
gallon on Thursday, and an additional 2.6 cents on Friday to settle at 
$2.35 a gallon. In this week's retail price report, nationwide gasoline 
prices are likely to exceed the record of $3.069 per gallon set in 
September 2005. The all-time, inflation-adjusted high of $3.22 per gallon, 
set in March 1981, is in sight. 

Over the last few weeks, however, the demand for gasoline has been dropping 
and is now just one percent above last year's demand for the same period. 
This is down by about 1.5 percent from the abnormally high demand of two 
months ago. 

The government remains optimistic that high prices will dampen demand, 
attract more gasoline imports, and encourage refiners to increase 
production. The EIA projects that although gas prices will be over $3 in 
May; they will drop back into the $2.90s during June and July and possibly 
increase again in August. The EIA says flat out they do not expect gas 
prices to get anywhere near $4 so long as there are no significant 
unplanned refinery outages, losses of crude production, or hurricane 
damage. 

In defending the industry, an American Petroleum Institute economist told 
Congress last week that high gasoline prices are largely due to high crude 
prices and the costs of environmental mandates. He maintained that 
improvements to refineries allow the industry to squeeze more gasoline and 
diesel from each barrel of crude so that this year's average gasoline 
production of 8.85 million b/d is a new record. 

Many paint a darker picture of the prospects for gasoline prices and 
availability later this summer (see this week's Commentary). The IEA is 
talking about a 1.6 million b/d shortfall between demand and production 
later this year and notes that significant drops are occurring in North Sea 
and West African production. In March OECD stockpiles fell by 17.1 million 
barrels, or an average of 550,000 b/d. This brought the average stock draw 
during the first quarter to what the IEA called a "dramatic" 930,000 b/d. 
The IEA also noted last week that "gasoline stocks are tight and may 
tighten further in June unless refinery capacity rises more sharply than 
current forecasts suggest." 


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That is incredible.

The average of all 24 OECD countries' stockpiles over 3 months fell by 0.93 
Mb/d.

In other words, supply is lagging demand by nearly a million barrels per day

and they are keeping prices stable by drawing down stockpiles.

This is really starting to look like we will hit the brick wall this year.

Dave