Michael Fitzsim...'s  Instablog

http://www.eia.doe.gov...

trailing 4-week supply is down 7.7% year over year. this would be great if this decrease was a result of policy initiatives as opposed to economic contraction...

I just got around to reading Schlumberger's annual report. I found this comment by CEO Andrew Gould, who should know, very interesting:

"The most important indicator of a future recovery in oil field services activity will be a stabilization and recovery in the demand for oil. The recent years of increased exploration and production spending, however, have not been sufficient to substantially improve the supply situation. The age of the production base, accelerating decline rates, and the smaller size of recently developed fields will mean that any prolonged reduction in investment will lead to a strong rebound in activity in the future."

I added the underline. Now, consider the fact that over the past 4-5 years, oil companies' exploration and production budgets were large and growing. Yet, despite these investments, the CEO of SLB says the supply situation has not been significantly improved.

Now, the US imports 65% of its oil. Perhaps someone should ring Energy Secretary Chu and let him know that being "agnostic" on natural gas transportation is not going to win him a 2nd Nobel prize. What a friggin moron.