Quote:
Originally posted by jkarolyi
[BI haven't seen any oil tank farms popping up around the country...has anyone else? Are companies really hoarding oil?[/B]
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Oil is a global market, you have to look beyond US borders and US inventory data.
The world's oil producers have appx 2MM bbl/day spare capacity but today it is about 1MM bbl/day (interruption in 650K bbl/day Nigeria and 400K bbl/day BP).
Increased uncertainty over the reliability of oil supply makes many countries want to hold larger inventories. Filling these inventories could be incrasing demand.
For example, China is building a strategic oil reserve to hold 10 days supply, to get the country up to 30 days' total inventory in storage. (The US has 160 days, Japan 160, Germany 130.) China consumes 7MM bbl of oil per day.) 10 days is 70MM bbl, or 70 days of the world's current spare capacity.
This is just one example, I don't know how the overall numbers look, but the point is that looking simply at US oil inventories is probably an outdated approach.