Bloomberg: Oil Drops for Second Day After Gain in U.S. Crude Stockpiles
Jan. 15 (Bloomberg) -- Crude oil fell for a second day in New York after a government report yesterday showed slowing demand sent U.S. stockpiles soaring to a 16-month high.
Inventories of crude increased 1.14 million barrels to 326.6 million last week, the highest since Aug. 31, 2007, the U.S. Energy Department said. Gasoline and distillate fuel supplies also rose. Fuel demand fell 6 percent, the largest one- week decline in almost five years, as the Federal Reserve reported the U.S. economy weakened further in the past month.
“The data continues to show that the overall demand for oil is very weak,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “The inventory build shouldn’t be surprising given the weakness in consumption.”
Crude oil for February delivery fell as much as $1.06, or 2.8 percent, to $36.22 a barrel in electronic trading on the New York Mercantile Exchange. It was at $36.25 a barrel at 12:38 p.m. Singapore time. Yesterday, futures 1.3 percent to $37.28 a barrel in New York, the lowest settlement since Dec. 24. Futures are down 61 percent from a year ago.
U.S. inventories of crude oil were forecast to rise 2.5 million barrels in the week ended Jan. 9, according to the median of 15 analyst estimates in a Bloomberg News survey. The increase last week left stockpiles 10 percent higher than the five-year average for the period, the department said.
“The stock levels around the world are at 84 days of consumption, which is a record high,” said Jan de Laat, global head of energy, trade and commodity finance at Rabobank International in an interview with Bloomberg Television. “In the short term that isn’t going to change, the demand isn’t there and the economy is still from the financial crisis.”
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6 comments:
The price of oil has finally levelled out. Now, hopefully, the economy will do the same.
TANKERS HOLDING OFF AT SEA FULL OF OIL -- LAND STORAGE TANKS FULL
Oil tankers are anchored or circling in holding patterns at sea full of oil. Land storage tanks are at capacity.
Oil glut prompts major stockpiling, January 15, 2009(New York Times) HOUSTON — "From the Indian Ocean to the South Atlantic to the Gulf of Mexico, giant supertankers brimming with oil are resting at anchor or slowly tracing racetrack patterns through the sea, heading nowhere."
"Peak" oil? Horse feathers!
It might be wise to consider oher factors - one hypothetical could consider the effects of a planned economy, as is China, on the rest of the world.
It's peak oil - run for the hills!!
TEN YEARS FROM DISCOVERY TO PRODUCTION?
This has been the rallying cry of those opposed to offshore drilling.
"It takes too long to make it worthwhile!"
(Of course, this would make it even more imperiative to start right away, if that was true...but it's not.)
This report on Indian ultra-deep water oil exploration & production puts the lie to the claim that it takes ten (10) years from discovery to production:
As reported in in Offshore magazine: Reliance Industries produces from first deepwater field in India, December 2008(Offshore) -- "Reliance Industries began production in the KG-D6 block of Krishna Godavari basin on Sept. 17, 2008. A first of its kind hydrocarbons production from any deepwater field in India, Reliance KG-D6 will account for 40% of the country’s indigenous hydrocarbon production, lending to its selection in Offshore’s Top 5 Projects for 2008."
The money quote from the report:
"Another impressive feat: From the time of its discovery, RIL started production of oil in KG-D6 in just over two years, making it one of the fastest greenfield deepwater oil development projects in the world."
"[J]ust over two years..." from discovery to production in difficult waters.
The report goes on:
"This has been achieved against challenges like difficult ocean conditions, lack of adequate subsea data, low sea bed temperature (5° C [41° F]), severe supply chain constraints, and a shortage of technical manpower. “Drilling in unchartered waters under hostile weather, including frequent cyclonic conditions, is always hazardous,” Ambani says. “We did that by deploying state-of-the-art drilling and production technologies.”
And on top of all the above it's in deep water: "The KG-D6 block is in the Bay of Bengal at a water depth of 8,000 ft (2,483 m), 50 km (31 mi) from the nearest coast of Kakinada in the state of Andhra Pradesh."
And we keep hearing the repeated claim that it takes ten years to bring an offshore oil field to production.
That's plain false.
Americans can bring any oil field to production as fast as the Indians, if (with a little American bragging) not faster!
The technology is ready on the shelf.
This field will have sizable production of high quality oil:
"The field initially produces about 5,000 b/d of crude and is expected to reach its peak hydrocarbon production of 550,000 boe/d over the next six to eight quarters. It produces sweet crude of 42° API which can be processed by any refinery in the country."
True each oil field is different, but it gives indication of what oil production can be from offshore oil fields.
The technology of offshore oil drilling & production is increasing by leaps and bounds.
OFFSHORE OIL TECHNOLOGY IS IN HIGH GEAR
To follow up on the last comment it seems appropriate to focus on technology: BP sets new subsea multiphase pumping records at King, December 2008 (Offshore)--
"BP’s King field in the Gulf of Mexico in Mississippi Canyon blocks 84, 85, 128, and 129 is the first subsea multiphase pump application in more than 1,676 m (5,500 ft) of water and more than 24 km (15 mi) away from its host TLP – double the records for each measure. The previous records were 914 m (3,000 ft) of water and 9.7 km (6 mi) from the host. Then Aker Kværner Subsea pumps also set a pressure differential record of 50 bar (5 MPa) over the pump."
Get a look at this undersea layout of oil producing technology.
Undersea oil technology is allowing Man to economically pump oil from under the sea like never before.
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