Is Oil Demand Falling Off a Cliff?

Is demand for oil falling off a cliff with the stock market?

The Department of Energy reports that the U.S. Petroleum Products Product Supplied was only 18.66 million barrels per day for the four weeks ending October 3.

click to enlarge:


This is the lowest level since June 1999.

Comments

[Goonghaeng:]

I'm not sure what factors go into the EIA figures, but aren't the Southeast US suffering from gasoline shortages? If so, then it's not so much that the demand has been falling off the cliff, but rather the supply has plummeted.

2008 Oct 09 02:23 PM

[oldgoldbug:]

That chart doesn't look so good.

2008 Oct 09 03:08 PM

[cjct:]

OPEC signalling that it might have to cut production only serves to reinforce the sentiment in the market that the oil markets are way oversupplied. That any funds are going long crude oil in this environment is unthinkable.

2008 Oct 09 05:27 PM

[mangolfer:]

Does anybody know somebody using more oil nowdays? Everybody everwhere is cutting back, it's not brain surgery to figure that out.....

2008 Oct 09 05:44 PM

[zztop:]

Southeast US appears to be transport infrastructure problem. Supply exists, just cannot be conveyed to that market.

2008 Oct 10 12:02 AM

[Sober Realist:]

Cutting back in oil consumption here in America can only go so far. Are we hitch hiking to work or are we all car pooling with are co-workers who live across town? It seems far fetched to me. Did we suddenly create a new liquid energy to fuel the transport sector? I'm still eating food produced with oil-based fertilizers, tilled with tractors, and hauled across America in trucks. And no, it's not feasible for the average person to grow their own food.

2008 Oct 10 12:39 AM

[Urbane Gori...:]

Googenhaeng,

Gasoline is just a part of the energy picture. Consider that an equal portion of oil provides for plastics, chemicals, building materials such as asphalt and that aside from gas, there is diesel, aromatics etc.

If the large manufacturers, such as Korea, Japan, China and the US are not making more Legos, plastic automotive components, building new parking lots etc, then, you'll find that there goes a big part of the demand for crude.

The next leg is that as manufacturing drops, then so does shipping, trucking and even rails. If you aren't making the products, the you don't need as much sea time, mileage etc. There goes a large hunk of the fuel demand.

As manufacturing and delivery drop, warehouses, and offices close and factories are idled. There goes another piece of the energy pie. (admittedly, coal and natgas provide most electricty here in the US, but that definitely is not true of other countries, such as in the Middle East.

'Oh my! I don't think we're in Kansas anymore!'

jegan ;-)

2008 Oct 10 11:44 AM

[fairguy:]

this oil crash is only going to set ourself up for the next oil boom. All oil companies are now on yellow alert and capital perservation is on their mind. New investment in new exploration, development will be greatly curtailed. This mean when the economy recovered, watch out for oil going pass 150 $/bbl. On the canadian side, all oilsand projects planned will be postponed or shelved. Only projects that are 90% completed will get done. Oil and gas exploration doesn't operate like a light switch, on and off at will. Oil and gas CEOs are conservative bunch. They need to see 90+ oil for 1 year or more before they feel comfy enough to start spending on exploration.

On growing our own food, this is a joke. Majority of us don't even know how to grow grass. We hired people to do those chores. One small detailed missed, if carrots and tomatoes takes 2 months to grow, what are u gonna eat during that time? Can somebody tell me how to grow beef and fish while we are at it?

2008 Oct 10 11:30 PM

[fairguy:]

john egan, it is true what u say but there is a minimum threshold of energy consumption for anybody to survive. Since energy price is lower now, i'm sure people would not cut back as much on energy consumption. Growing food still required fertilizer, whether at home garden or in the field. Unemployed people still demand energy at home like running TV and running AC or furnace that would not be if they were gone working. I think too much energy picture is focused on the US. Countries like South America, Asia, middle east would not cut back of material and energy consumption by much as they are still booming with population growth, and they all want to live and be wasteful like the amercians.

2008 Oct 10 11:31 PM

[Diegojames:]

IT WAS COLD IN SOUTHERN CALIFORNIA LAST NITE. I PUT ON FANNEL but wanted to LITE THE FIRE PLACE. I will DRIVE MY USUAL 22 MILES ROUNDTRIP TODAY.
MY WIFE IS UPGRADING THE KITCHEN now that DESIGNERS AND CRAFTSMAN ARE SUFFERING from POOR MARKETconditions.
I AM STILL LONG CVX, OXY,XTO,CHK,BUT WAS THAT ALL SOLD TODAY BY THE CEO??,BTU,CNX AND CNI TO HAUL THINGS FROM COAST TO COAST....ITS going to be A COLD WINTER WITH ALOT OF BAD NEWS.
THE ECONOMY IS NOT SOUND...BUT THIS WINTER WILL BE COLD AND PEOPLE NEED HEAT AND FOOD AND DRUGS.
WATCH FOR CVS . PICK SOME UP SOON .
I WILL SELL AU (GOLD) AND BUY FOOD AND MORE VALE-RIO AND TCK(COAL) THIS TUESDAY because the WIND is blowing COLD UP ON THE MOUNTAIN ABOVE NORTHRIDGE,CALIFORNIA WHERE the FINANCIALquake IS STRIKING AMERICA WHILE I WAIT FOR THE NEXT earthquake to hit SUNNY CALIFORNIA and for the cold fronts to hit the thermostats of AMERICA .
DIEGOjames pouring a MARTINI
Northridge, California
PS what about that GM/Chrysler/Renault Merger???

2008 Oct 10 11:57 PM

[fairguy:]

yes, it is a fact that sunspots in its low cycle now, and historical climate record say this will lead to colder temperature. I heard some part of montana is snowing now. Another trivals, in the past recessions, people gain weight. Why? They are depressed at home and they eat more.
Also i heard many plans for LNG terminal are toasted due to for gas prices and poor credit lending market. Those shale gas will help out for 3-5 yrs. They have high decline rates and they are expensive gas to drill for.

2008 Oct 11 03:06 PM

[fairguy:]

oh yea, another point i like to make:D
that oil demand dip from the chart can be partly explained by seasonal drop during a period between end of summer driving and before the upkick of winter energy demand.

2008 Oct 11 03:11 PM