Economy
Related: About this forumOil's Not Coming Back. Here's Why
by Moming Zhou
7:01 PM EDT
May 12, 2015
Oil bulls whove cheered a rebound of 40 percent from a six-year low should take heed: Unless demand accelerates, the rally is in danger.
The omens arent good. The U.S. government expects global consumption to grow next year at less than half the rate of 2010, when the world was emerging from a previous recession. The growth is insufficient to close the gap with rising supply, according to Royal Dutch Shell Plc, Europes biggest energy producer.
The last time oil crashed, during the 2008 financial crisis, Chinas appetite for commodities seemed insatiable, and powered prices higher. This time, Chinese fuel use is growing at half the rate of the past decade, and sliding U.S. shale output could reverse as prices rise, smothering the gains.
The recent rally appears driven by investors looking at catching the bottom of the market and the expectation that U.S. oil production has reached a turning point, said Harry Tchilinguirian, BNP Paribas SAs London-based head of commodity markets strategy. But fundamentals, notably in the U.S., have not changed much.
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Slowing Demand
Global oil demand will grow just 1.3 million barrels a day to 94.58 million next year, the Energy Information Administration said Tuesday. It jumped 2.89 million in 2010 after the previous price crash.
more...
http://www.bloomberg.com/news/articles/2015-05-12/china-is-missing-ingredient-in-oil-s-recovery-from-six-year-low
Erich Bloodaxe BSN
(14,733 posts)It's probably already too late, but we've got to end the fossil fuel addiction. As the California drought shows, you need to use LESS of a resource than is available in real time, not mine reserves that aren't being replenished faster than you use them. We need to use the energy the sun is sending our way now, not the energy it sent millions of years ago.
Gregorian
(23,867 posts)It's nice to get ready to post something, and see that some nice person has already posted it.