tag:blogger.com,1999:blog-5235419263414453422.post2424000321605206378..comments2024-02-23T01:30:06.101-08:00Comments on Early Warning: May Global Oil Supply and the Libyan Mini ShockStuart Stanifordhttp://www.blogger.com/profile/07182839827506265860noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5235419263414453422.post-10941957474922679492011-06-17T03:43:29.347-07:002011-06-17T03:43:29.347-07:00Thanks for the figures Stuart. Looking at the esti...Thanks for the figures Stuart. Looking at the estimated gap (1.6 mb/d) between what would have been expected and what actually occurred you might have expected this gap to affect stocks of crude oil and products. <br /><br />However, as far as I can see there is little sign of the loss of supply in stock data either from IEA or EIA. Anyone who have another view on the stock data or would like to comment on this?Derweinhttps://www.blogger.com/profile/03605260263789101123noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-89832948984046369652011-06-16T13:14:43.677-07:002011-06-16T13:14:43.677-07:00It's worth keeping in mind that the direction ...It's worth keeping in mind that the direction of causality in the IMF's estimate of the income elasticity of oil is from GDP -> oil consumption. It's not really valid to use it the other way round.<br /><br />For instance: the US income elasticity of oil was in the same range until the 1970's. From 1978 to 1982 oil consumption fell by 18%, while GDP grew slightly.<br /><br />Since 1979, US oil consumption has been flat overall, while GDP has grown by 150%.<br /><br />Estimates of income elasticity of oil are heavily influenced by the period before 2004 when there was always slack production capacity, so when economic activity rose, oil consumption could rise as well.<br /><br />We can't assume that the opposite direction of causality behaves the same way. Obviously rising oil prices will have an effect, but it will be much weaker than the effect in the other direction pre-2004.Nick Ghttps://www.blogger.com/profile/12721405349726668110noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-484789918762028732011-06-16T08:48:02.833-07:002011-06-16T08:48:02.833-07:00There are only three candidates for forces pushing...There are only three candidates for forces pushing the economy back into slowdown. We certainly can't blame this on the Fed and interest rates. There's the ongoing real estate mess, which *is* ongoing and hasn't really changed much since 2009. That's not likely a reason for this slowdown, though it is a constant drag.<br /><br />Next is the ending federal stimulus. That was counteracting the housing drag. As the stimulus ends, we would expect somewhat slower growth. But this is slowly petering out - 83% of the funds have been spent, and it will take another few years to get to zero as projects get completed.<br /><br />Finally there's the increase in oil and food prices. Oil prices rising is a good part of the food price rise too. <br /><br />So I'd say the real estate drag and stimulus ending are mostly enough to counteract weak business expansion, and between the general debt problems and oil/food prices increasing, we have enough to counteract most of the potential increase in consumer spending. Really, higher oil prices are the biggest part of that, and Libya does explain most of the increase. I think you're right on.kjmclarkhttps://www.blogger.com/profile/00490417628052004621noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-8170857193936247432011-06-16T07:25:16.678-07:002011-06-16T07:25:16.678-07:00It is likely that the actual growth in gross energ...It is likely that the actual growth in gross energy up until February was somewhat less than the total liquids production indicates, because increasingly more of the liquids quantity consists of fuels with lower energy content (e.g. NGLs, ethanol). When you factor in the almost certainly gradually declining average EROI of the conventional fossil fuels in the mix, the total net energy available to the economy is even less. (For some more detail on this view, see http://michaelaucott.blogspot.com/2011/01/oil-production-and-fossil-fuels-percent.html) So, the recent numbers may be well within the ballpark.Mike Aucotthttps://www.blogger.com/profile/05692592170835103639noreply@blogger.com