Some of us stopped believing in fairytales long ago and then there were those that never thought that Goldilocks ate anybody’s porridge. So, there are two types of believers. Those that did and now don’t anymore because they have grown up and those that never ever did have the wool pulled over their eyes. It’s the same with the economy these days. Either you believed that it was getting better and listened to the propaganda emanating from the once-hallowed portals of the statist politik bureau of the government or you never believed a word of what got spun by the spinners and the media-controlling decision-makers that are there to eat your porridge and sit in your chairs (even lie in your beds). The latter have always thought it was all just a load of old Tom Cobbley from the start.
So is the economy getting better or is it a fairytale dream?
Who knows the answer to that question today? Well, if we believe the International Energy Agency (IEA), then the economy is getting better around the world since oil consumption is increasing. It has been forecast to increase and will outstrip even shale oil production which is most certainly taking off in the USA today and is set to do the same elsewhere (in the UK, for example). Whether we believe the IEA is another matter entirely, but it is the organization that advises the largest energy-consuming countries in the world on their policies regarding energy consumption and production.
• The IEA has just increased it forecast of demand for oil from OPEC countries by 200k barrels per day, now standing at a total of 29.4m barrels per day.
• It has also stated that this year oil consumption should increase by 1.3m barrels per day.
• The US is forecast to increase oil production by 780, 000 barrels per day by the end of 2014.
• This increase offset the drops due to civil unrest in Libya (sometimes falls in production of up to 10% were being experienced).
• There were also drops in production from Iran as sanctions were still being imposed (a drop of 320, 000 barrels per day; although the drop was largely reversed towards the end of the year with the warming of relations with Iran).
• The US mainly benefited from that fall in production by upping their own levels.
• Not only has there been a rise in the projected level of production for 2014, but this will consolidate last year’s increase of 990, 000 extra barrels per day being produced in the USA in 2013.
• That was one of the largest annual growth rates for the country.
Demand for oil has increased so much over the past few months in the world that the reserves have been almost depleted and OPEC will have to pump more in order to keep up with the growing rate of demand. Oil stocks in the Western world are reported as having plummeted by 53.6 million barrels last November. That is the highest level of depletion since 2011.
Brent crude oil is trading at $107 today. That’s just lower than the $108.70 it was trading at in 2013. In 2012, it was at the $111 mark. Are we in for another increase in oil this year? If we are to believe the IEA, we are. Oil is set to rise.
Whatever happens in the future and whether the economy takes a turn for the better (finally, some might hasten to add), we might just well read behind the lines and see the true meaning of the fairytale that is being spun. Fairytales are intended to teach us something. This one tells us that when the closing lines are called, the same old people will be reaping the benefits. The oil companies will be raking it in as the price of all goes sky-high. Once upon a time, we were surprised when good old Texas Tea hit $100 a barrel. Now, it doesn’t even wake Goldilocks up from her sleep.
And they lived happily ever after?
Originally posted: Oil Set to Rocket