Thursday June 12, 2008

Crude oil price surges more than $5 on US supply drop, global oil production fall

bloomberg.com :

Crude oil was steady after rising more than $5 a barrel in New York yesterday [11 Jun 2008] on a US report that showed inventories fell for a fourth week, spurring concern stockpiles may be strained during the summer driving season. Inventories have dropped 7.2% since May 9. Global oil production fell for the first time in five years in 2007, BP said in its annual Statistical Review of World Energy. The world faces an "oil crisis" and the International Energy Agency stands ready to release emergency stockpiles in the event of a disruption, IEA Executive Director Nobuo Tanaka said. Crude oil for July 2008 delivery moved as high as $138.30 a barrel on the New York Mercantile Exchange [NYMEX]. Oil reached an all-time high of $139.12 a barrel on June 6. Futures have doubled in 12 months as investors looking to hedge against the dollar's drop helped push oil, gold and corn to records this year.

- The big whopper is the announcement by BP that global oil production had fallen in 2007. The news item says that this was the first time in 5 years - from a peakoiler's point of view, this certainly won't be the last time either. It could well be followed by announcements that the subsequent year would be the second consecutive year, and the third, and the fourth, and so on, until the world looks into the rear view mirror, just like Matt Simmons had said, and realizes that we have reached Peak Oil.

Years ago, veteran peakoilers had warned the community that as we approach the threshold of Peak Oil, crude oil prices will become more and more volatile, with sharp swings in both directions. We have been seeing that, with the $11.33 rise when it hit the $139.12 record and over $17 in just 2 days, and now once again, with the $5 surge in a single session. The closer we are to the peak, the more volatile it will be. Soon, $10 swings in a single day will be the norm, and then $20 swings will just be "all in a day's work".

We are truly heading into the era of Peak Oil now.

Are you prepared?

See also :

1. Crude oil price rises by unprecedented $11.33 to reach new $139.12 record on NYMEX
2. Peak Oil, Peak Airlines - as oil prices go up, airlines cut flights and jobs
3. Angry citizens protest as Malaysia eliminates subsidies, raising petrol prices 40% overnight
4. Indonesia to pull out of OPEC with immediate effect as oil production declines

(2008-06-12 13:20:05 SGT) [Energy] Permalink Comments [1]

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