For anyone who's following the decline of oil, here's some news to make you say "Crap!"

[GliderGuider]

First off, remember how back in November OPEC decided to cut their production because oil stocks were just too high? Well, that was then, this is now:

International Energy Agency Warns On Sharp Oil Stocks Falls

DUBAI -(Dow Jones)- The International Energy Agency warned Tuesday that global oil and fuel inventories were being sucked lower at an unusually high pace this year, leading it to fret about demand being met in the coming months and amplifying the need for more crude from the Organization of Petroleum Exporting Countries.

The agency's widely-anticipated monthly assessment of the global oil balance said that stockpiles of crudes and fuels held by the Organization for Economic Cooperation and Development group of industrialized nations were falling at a pace of 1.26 million barrels a day so far this year and could spell the largest stock draw in a January-to-March period in more than 10 years.

OECD stocks, led by fuel products, are expected to fall sharply by at least 66 million barrels a day once February data are released.

And the agency pointed out that the year-on-year increase in the stockpiles figure of 2.668 billion barrels at the end of January had fallen to a small 26 million barrels, in stark contrast to more than 78 million barrels a month earlier.

Saudi Arabia's Oil Minister Ali Naimi last year led concerns among OPEC members over ballooning inventories, which in September were more than 120 million barrels higher than a year previously.

OK, so pretty soon they'll just ask OPEC to open the taps again, right? Well, there might be a little problem with that. People who are following along will also remember an article on The Oil Drum that analyzed Saudi production, and concluded that they are pretty much tapped out. In an article today, one of the other leading lights on that board has revisited his earlier analysis of KSA's situation, and has concluded the following:

The implication of this is that the 150 Gb estimate for Saudi Arabia is probably more accurate than 186 Gb, which puts Saudi Arabia at about 73% depleted, which means that we are really, really screwed.

As petroleum stocks continue to fall this spring and demand from the summer driving season picks up, there will be a call for OPEC (i.e. KSA) to turn the taps and let her flow. By June we will know for sure whether the Kingdom is bullshitting us or not. I strongly suspect that, as Jeffery Brown says above, we are really, really screwed.

[pscot]

1. Oil prices fell below $59/barrel in New York today

God's in his heaven, all's right with the world.

[GliderGuider]

2. Thank God oil traders don't read The Oil Drum, eh?

I wonder what will happen when reality breaks through, as it always eventually does?

[hatrack]

3. Or, as petroleum geologists are wont to say . . .

"Whoops!"

[bighughdiehl]

4. Traders must be fucking stupid

I caught this article at TOD, too. Nice catch gilder. So, Gas prices ar shooting up while crude falls(closed below $58 today), and meanwhile we've got these inventory drops,and I saw something about Mexico cutting deliveries to us, and the Saudis cutting deliveries to Asia. So, the price of crude dropping the past few days makes ZERO sense. Traders must be really fucking stupid-I thought they would have access to better info than us? Here is a possibility I would like to submit(yes I am now a peak oil believer):

Refiners/western oil companies/other BushCo connected or Enronish forces have decided to just profit from a gasoline shortage by letting that supply come up short, so gas prices shoot up, while they just decide not to bother bidding up the price of crude that they know may now be unavailable at any price. So, they save a few bucks on their feedstock(crude), but have to jack up gas prices in terms in supply/demand.

AM I way off base as how the markets/system works or what might be going on?

[GliderGuider]

7. That's about it

I think "they" realize there's sod-all they can do about the situation, so they've decided to simply loot what they can before the herd gets spooked and stampedes. To keep from scaring the horses for as long as possible, they're being vewwy, vewwy quiet...

They've probably convinced themselves that it's all for our own good - if we knew what was happening we might hurt ourselves in the panic. They're always looking out for our best interests, doncha know?

[Old and In the Way]

5. Good thing we took all that Iraqi oil off the market.

The war sure has been profitable for those that are maximizing the price through the peak oil curve.

I wonder what we could have done with the $2TT if we had invested it in getting ourselves energy independent - instead of creating wars of profit for Big Oil and Halliburton?

[bighughdiehl]

6. Yep....

Diddly dumbfuck and/or his puppetmasters sure have pissed away a lot of moola that could have gone toward alt energy R&D/production
2 Trillion dollars is enough to put a photovoltaic systems on tens of millions of residential rooftops, or enough for a couple million of the larger windmills, which could be providing power to a good chunk of the country and/or splitting hydrogen for fuel. Assholes! Ok, enough math-it shows the depth of their assholism, I can't take it.

[Old and In the Way]

8. Not to mention the meaningful jobs that could have created to make it happen.

Special thank you to our Supreme Court for facilitating the demise of this once great country.