Sunday, June 01, 2008

Oil Market Fundamentals

The chart above (data available here from Net Oil Exports blog) shows Net Oil Exports of the top 20 oil exporters, representing 93% of total world exports, versus the world price of oil, from January 2001 to April 2008 (for oil exports) and May 2008 (for oil prices).

The story seems clear: Net oil exports peaked during the 2004-2006 period, and they have been declining in 2007-2008. In the face of rising global demand, oil prices have been increasing. Of course, there are the effects of the falling USD and speculators, but the chart below looks basically the same when oil is priced in euros.


At 6/01/2008 10:27 AM, Anonymous E. Harokopos said...

"The story seems clear: Net oil exports peaked during the 2004-2006 period, and they have been declining in 2007-2008."

On the contrary, what is clear from that chart (data of questionable origin) is that:

(1) Oil prices fell for a while during 2006 when the exports were also falling

(2) Oil prices rose during 2007 when oil exports increased.

(3) Only recentrly and during the last few months, oil exports have falles moderately while oil prices have skyrocketed.

(4) More importantly, oil prices rose in the period 2002 - 2005 while exports where increasing.

Conclusion is that oil prices are positively correlated to exports, not otherwise as suggested.

This should ring a bell.

At 6/01/2008 12:12 PM, Blogger rufus said...

I attempted a simple connect the dots exercise, with three different data bases. Venezuela & Mexico = V&M. In 10/07, V&M accounted for 20% of total US petroleum imports and probably about 40% of Gulf Coast imports.

In any case, connecting the dots:

V&M showed a sharp annual decline rate in net oil exports in 2007.

From 10/07 to 3/08, they showed a very sharp decline rate in the volume of net oil exports delivered to American shores (annual decline rate of 32%/year). *Bold Mine

Over the past four weeks, we have seen a big drop in the volume of crude oil imports into the Gulf Coast (from all sources).

Quote from Jeffrey Brown - Originator of the "Export Land Model" at The OIl Drum.

More about the Export Land Model, here.

Folks, everybody thinks about "Production;" but to Importers (like us) it's all about the amount of oil that's available for purchase.

It's getting smaller.


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