Month: February 2011

Video and Presentation at ASPO.TV

Based on the ELM, we have concluded that given a production decline in an oil-exporting country, the Net Export Decline (NED) rate will exceed the production-decline rate and the NED rate will accelerate with time – unless the exporting country cuts its oil consumption at the same rate as, or at a faster rate than, the rate of decline in production. Furthermore, the bulk of post-peak Cumulative Net Exports (CNE) tends to be shipped early in the NED period.

So far Libya is the only major oil exporting country in which the upheavals appear likely to threaten oil exports in the near future. Benghazi in eastern Libya has fallen into the hands of the demonstrators and a local tribal chief is threatening to cut off oil exports unless Tripoli stops using violence against demonstrators. Libya exports about 1.5 million b/d most of which goes to Europe.

Given that US gasoline prices inevitably rise from February to the summer driving season as demand increases and more expensive blends are produced, observers are starting to talk about $3.50 gasoline this summer and even $4 if there is trouble in the Middle East or if the Saudis do not come through with their widely anticipated production increase this year.