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All good solid Fundamentals concerning Oil & Commodities over 2010


China's crude oil imports may increase 15 percent this year as the world's second-biggest energy consumer starts building the next phase of its strategic oil reserves, China Oil, Gas & Petrochemicals forecast.


China's crude oil storage capacity will reach 44.6 million cubic meters by 2011, the fortnightly newsletter published by the official Xinhua News Agency said. The Organization of Petroleum Exporting Countries probably won't raise output in 2010,



Jan. 18 (Bloomberg) -- Oil rose for the first time in six days, driving shares in Canada and emerging markets higher, on speculation demand will rebound this year as the global economy recovers. The pound strengthened after a survey showed U.K. house prices increased.


Crude oil advanced 0.3 percent to $78.25 a barrel at 4:05 p.m. in New York, while copper added 0.9 percent in London. The MSCI World Index climbed 0.2 percent, led by commodities companies in Europe and Canada. Russia's Micex Index rose to a 17-month high. U.S. markets were closed today for the Martin Luther King Jr. holiday.


China's crude oil imports may increase 15 percent this year as the world's second-biggest energy consumer starts building the next phase of its strategic oil reserves, China Oil, Gas & Petrochemicals forecast. International Monetary Fund Managing DirectorDominique Strauss-Kahn said in Tokyo it's too early for policy makers to withdraw stimulus packages that are resuscitating global growth.


"The emerging part of the world is going to increase its demand for commodities," said David Cockfield, who helps oversee about $290 million as a money manager at MacNicol & Associates Asset Management Inc. in Toronto. Rising consumption in developing countries including China "has re-asserted itself," he said.


Canada's Standard & Poor's/TSX Composite Index increased 0.6 percent, the first gain in three days, as the nation's biggest natural gas producer, EnCana Corp., climbed 1.3 percent. Europe's Dow Jones Stoxx 600 Index advanced 0.7 percent as higher metals prices boosted the earnings outlook for basic-resource producers and sales at Cie. Financiere Richemont SA, the world's largest jewelry maker, unexpectedly climbed.


Oil Demand


Crude oil for February delivery rose as much as 68 cents to $78.68 in electronic trading on the New York Mercantile Exchange. China's crude oil storage capacity will reach 44.6 million cubic meters by 2011, the fortnightly newsletter published by the official Xinhua News Agency said. The Organization of Petroleum Exporting Countries probably won't raise output in 2010, according to Qatar's Energy Minister Abdullah bin Hamad al-Attiyah.

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Hi Flower.

Read this item you posted and couldnt help but be a little concerned :weirdsmiley:


Its hard sometimes to get to the bottom of a good story. I hold quite a few Oilers but have no opinion on Peak Oil etc ( I realize Peak Oil is not the main point in the post or the letter).


Personally I feel there are other factors including Market manipulation which are far more important.




Found this which I felt was worthy as a follow on



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That reference reads like something straight out of a spruik sheet. Long on hype, short on fact.


Here is a far lengthier and more objective assessment. Yes it's a great resource to have, but it's tight on average with some sweet loose pods. The real point is no-one knows how much is recoverable as yet. Maybe technology will enable lifting production form this formation to another level, just like horizontal drilling has done.






1. The Bakken shale has produced about 111 million barrels of oil during the last 50+ years in Montana and North Dakota.


2. Total Bakken production is still rising, and producing at the rate of 75,000 BOPD in October 2007.


3. Because of the highly variable nature of shale reservoirs, the characteristics of the historical Bakken production, and the fact that per-well rates seem to have peaked, it seems unlikely that total Bakken production will exceed 2x to 3x current rate of 75,000 BOPD.


4. The latest boom in Bakken production is driven by the application of horizontal wells and hydraulic fracturing technology, which has added about 70 million barrels of production in 7 years. Ultimate recovery of the already-drilled wells should be at least double this volume.


5. The USGS estimates the mean volume of technically recoverable hydrocarbons to be 3,649 million barrels of oil. This is roughly 7 to 12 times the size of already known resources.


6. Based on current production and areas likely to be drilled, the USGS estimate of technically recovery resources seems optimistic.


7. The Bakken potential resource, while large by US onshore field standards, will have only a minor effect on US production or imports. Using 2006 US imports and consumption for comparison, the Bakken undiscovered resource of 3,649 million barrels of oil, if subsequently discovered and fully developed, would provide us with the equivalent of six months of oil consumption or 10 months of imports, spread over 20 or more years. In reality, the reserves developed are likely to be many times smaller than this value.


8. The October 2007 production rate of 75,000 BOPD amounts only 0.4% of US oil consumption, or 0.6% of imports.


9. Per-well Bakken production peaked in August 2005 at 116 barrels a day, and was down to 79 barrels a day in October 2007. If the Bakken production history in the 1990s can be used as a guide, the peaking of per-well production may portend a peak in total Bakken production.





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Will stick my neck out and say the ASX has way over reacted in marking down in the oil/gas sector. Several shares are selling at less than when the POL was almost half current price. There is no doubt the market is saying get out of oil/gas stocks at any price and many investors appear to be doing this. Many of the quarterly reports are pretty solid. Several in this period have moved to producers with proven reserves and are in a far better position than when their share price was a lot higher.IMO now is not the time to give up on quality smaller oil/gas stocks. The reaction by the market to AZZ presentation today appears almost crazy to me. Just read it. Unless there is no future for oil/gas you would have to think shares have moved into stronger hands over the last 3 weeks.
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With oil up almost $2.00, NG 29cents and Dow 110 we should find out today if oil stocks have been a bit overdone on the downside. I certainly would not like to be short on thinly traded better quality smaller ASX oil stocks. Its not only here they have been smashed POE for example was down $2 in only 26days. Be interesting to see how market reacts to marking down AZZ after yesterdays presentation, did anyone who sold out actually read it?



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The oil and gas scene in Australia has been influenced by Mike Hawkins comments about an impending gas glut.See latest O&G copy. Apparently he is from the Eureka report, a report incidentally that I had a free trial to but discontinued.


Hawkins has been influenced by reduced demand in USA and the emerging USA shale oil and gas plays. I believe he should be looking at the following factors

1. The very strong Asian demand fueled by both China and India.

2. World oil field depletion rates of 6.7% per annum.

3. Continued population growth.

4. The very high depletion rates of the USA Shale oil and gas discoveries and the growing resentment by enviromentalists re their potential to contaminate aquafiers. Exxon's latest purchase of XJO has a back out clause if this becomes a problem.

5. Hawkins should also appreciate that the Chinese and Koreans have invested in Canadian Tar Sands. You would only do that if there was a looming energy shortage.


The easy fruit has been plucked.


Oil, A Precious Finite Resource.

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Hi Krumbs,

Thanks for the reply and I agree. It was the dismissal at the bottom rather than the article its self I was putting up for digestion and comment. The article its self is more or less the same as the one in the post I was replying to.

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Words of a wise sage -






The USA is a large producer with somewhere around the 9.5mil barrels produced per day. Looking at the USA reserves the largest estimate one could find was the USA had 24.2 billion barrels of reserves. Now all US production is used for domestic use and on top of that the USA is a huge importer. Now if we want some frightening numbers if the USA is pumping 9.5 million barrels per day how long will their estimated reserves last? Again it explains a lot about recent events.


Anyhow the world price of oil I feel is more set by importers of oil who have to buy on the market off the exporters which I have listed. Now my number for 42 million barrels a day I think is what the net exporters of oil produce. Including the 9.5 million say the US produces for domestic use doesn't really explain the supply situation. All US production is used domestically as well as a fair chunk of the 42 million barrels produced each day for export.


Having a stab at it I think the USA consumes somewhere around the 14 million barrel a day mark over and above their domestic production. In total somewhere around the 24 million barrels per day level. I am not confident of this number but have found a few sources for it but the range in estimates is huge. Some US goverment sites seem to be calling the number lower to the extent of being absurd. Others have it at a level approaching total global production which again is absurd.


Bottom line USA consumes about 25% -30 % of the oil produced for export by every county. That is one hell of a chunk.


Very hard to get a straight story. Have used OPEC for world reserve numbers. Have used opec as well for global export oil numbers and these have been confirmed by other sources. As to the rest. Each one contradicts the other. FOund one place listing known global reserves which did not even have Iraq listed. As the holder of the second or third largest amount of reserves this was unbelieveable. Russia has around the same. Iraq official number is 114 billion barrels but very very likely to be up graded with some work.


Anyhow an interesting question the old demand and supply one here. If the US number are correct their will have to be a massive increase in capacity of production of the exporters over the next 10 years to cover the shortfall.




PS - The above had foreshadowed current conditions with foreboding accuracy. Considering the state of affairs, it may well yet prove to be an uncanny depiction of forthcoming revelations...

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IMO OPEC dictates what is refined, the US can have a massive price influence short term by releasing some or restocking some of its vast crude oil emergency stockpiles ,whether peak oil has come and gone is open to debate, but again IMO its the USD that dictates all.



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