Source: blog.residesi.com
Dear readers,
I have a couple of technical posts in the pipeline that a couple of weeks I want to write, but the hypnotic current events force me to keep writing about what is happening instead of what will happen and to discuss how we can cope. But it is inevitable: every morning you wake up and look at how is the price of oil, for example in the Oil-page Price.net :
Mixing anxiety and excitement that occurs see the evolution of oil prices these days, with ups and downs of several dollars and lost a little perspective on what is normal and people are still anxiously daily price fluctuations, believing them to interpret the certainty the global supply of oil is falling because of the different food riots in the Arab world, or even that the terminal decline of oil production has already begun. Nothing is further from the truth. You have to remember that OECD countries have a cushion of about 1,600 billion barrels that are stored ( Strategic Reserve) to meet contingencies (typically supply interruptions of up to 90 days), compared to 1.6 million barrels per day (mb / d) represent that Libya was exporting 1,000 days of supply, ie, about three years. It is true that the role of strategic reserves to cushion the prices not only fill gaps, but can be seen that there is a lack of oil given the problem of lack of fungibility oil that OPEC can supply to fill in missing Libyan oil (the surplus of the OPEC oil is of inferior quality, why not produce it regularly, so it has a higher sulfur content and southern Europe's refineries can not refine it as is.) On the other hand, since the average consumption world oil during the second half of last year exceeded 88 mb / d but output was around the 87 mb / d , that million barrels a day has gone missing subtracting strategic reserves. That is, being used as strategic reserves as a price control mechanism, which is dangerous because it undermines their main function, which is to prevent sudden shortages. However, concerns about the economic recovery in the OECD countries has led them to take, discreetly, this measure of left slightly open tap its strategic reserves, making good the Castilian of the bread today, hunger tomorrow .
In Spain it is clear that the excitement has spread in the government. After urgent approved last Friday, this week the newspapers are reeling a new set of measures that seek to minimize energy bills, reduced lighting in cities and highways, parks sharing mobile vehicles of various government ... Are announced reforms to improve the energy efficiency of buildings, and there will be more and more measures. In Europe the debate is only beginning timidly , which suggests that the most delicate situation of the English balance of payments is what has led the English government to rush. Does this mean that the state of the finances of the English State is worse, or more vulnerable-than is recognized? Or that is more aware of Peak Oil and its implications? (Maybe they read my letter , despite signs to the contrary ). In any case, the measures are insufficient and the inability to address the need for a profound change in the production model leads them to fall into the chant of energy efficiency, fallacy of speaking another day. The fact is that the English prime minister, Mr Jose Luis Rodriguez Zapatero, is touring several Arab Emirates seeking to secure oil supplies in exchange for the massive introduction of capital their sovereign funds in certain assets on which the Government holds the key (such as savings banks more or less supervised by the state after its severe financial problems last year). surely know that 49.5% of oil supply in Spain is in danger ...
And yet, despite the incipient civil war in Libya and possible U.S. military intervention in that country, despite the instability in most Arab countries (and many other countries, with their own food riots but without oil, to which Western public opinion, absorbed in his own anxiety is not pay attention these days ), although Spain - and probably other European countries can not take a price above $ 100 a barrel like the last two months we have ... despite all this, do not know if we are already entering the next phase of our energy descent or all of this is just a feint of heart. The Northern Hemisphere cold season is ending, and with it demand for oil will fall over the coming weeks, which should significantly reduce prices in a market as stressed as the present. After the revolutionary collapse of Tunisia, Egypt and Libya, the other oil exporters have learned their lesson and are anticipating the event, giving new subsidies to their people and at the same time strengthening its selective repression, and in many cases, with the help and advice from the Western powers, who refuse to be dragged into a new wave of global economic recession ... These factors tend to wet the wick of the bomb that we have all been composed, and there might not be to postpone the next peak in prices, the next crisis for a while. I personally think it's difficult to avoid the next price spike and the ensuing wave of economic destruction takes place this year, probably around the summer, but there are many uncontrollable factors that are beyond the navel-gazing Western vision, such as how development will China, which consumes and 9 mb / d of oil but accumulates many internal imbalances, with rising inflation, social tensions suppressed with an iron fist and a foreign market us in a position of contraction.
We are climbing the next hill of a roller coaster, and do not know if after the summit is a short fall and bearable or longer and more destructive. What we do know is that the longer we play this game, which more than mountain seems roulette without making structural changes are needed beyond the tecnooptimismo irresponsible magic and the accumulated tensions in an increasingly weaker bring us closer to that peak after which the fall will be terrible.
Dear readers, we need your help to make possible the change we need. Stay tuned.
Salu2,
AMT
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