The original article is buried behind the paywall… but here’s a link to the story.
Fresh data from the U.S. Department of Energy show the amount of petroleum products shipped by the world’s top oil exporters fell 2.5% last year, despite a 57% increase in prices, a trend that appears to be holding true this year as well.
There are several reasons behind the net-export decline. Soaring profits from high-price crude have fueled a boom in oil demand in Saudi Arabia and across the Middle East, leaving less oil for export. At the same time, aging fields and sluggish investments have caused exports to drop significantly in Mexico, Norway and, most recently, Russia. The Organization of Petroleum Exporting Countries also cut production early last year and didn’t move to boost supplies again until last fall.
The WSJ isn’t quite coming out and stating that we’ve hit the ceiling for how much oil we can produce at any given moment, but this is probably about as close as they will come to doing so until it’s blatantly obvious to all.
I believe we are close to reaching a tipping point here, folks. How close is hard to say, and I won’t embarrass myself by making a wild-ass prediction as to the date of when we start downhill. There are too many variables in play, and in the end it doesn’t make that much of a difference if we start to decline now or in five years’ time. The important lesson here is that demand is at an all-time high and oil exports are dropping. No one else is stepping up to profit by putting more oil on the market, and if prices get too high it will hurt the global economy and slash world demand accordingly.
The time to sell your SUV or your exurban McMansion was several years ago. We have friends who live in the outer twin cities that are upside down on their mortgage now. I don’t know that they will ever get out from underneath it except through hyperinflation or foreclosure/bankruptcy. They will not be alone, as more & more Americans figure out they built too much, too far from work, and borrowed too much to do it. Those that made better choices can laugh at them if they like, but they should do so knowing that those over-extended Americans could easily bring down the house of cards known as the US economy. Their pain will eventually affect us all.
HT: The Oil Drum