2013 Oil Demand Reached Pre-Recession Levels as Year Neared End

January 29th, 2014 | by Morris Beschloss | Comments

Another sign of a previously moribund oil demand going back to pre-financial recession levels was the close to 20 million barrels a day in October. This had not been seen in the U.S. for the past five years. Such demand reflected a three percent growth level, not experienced on a month-to-month basis since August 2011.

When including oil derivatives, such as gasoline, heating oil, jet fuel, diesel, etc., it’s becoming apparent that this leading fossil fuel is unexpectedly flexing its muscles.
This is occurring despite technological energy usage advances, and the inching up of solar, ethanol, and the greater use of natural gas, especially in the generation of electric power.

This expanding phenomenon is one reason that the pace of both West Texas Intermediate (light domestic crude) and worldwide Brent crude costs have stayed at price levels nearing the “bubble stage,” not experienced since the price crash that brought record prices down to less than one half in mid-2009, after reaching unprecedented peaks in July 2008.

These statistics should give ample fodder to support the current expansion levels of “fracking” shale development. This procedure has only excavated less than 10% of the potential now attributed to reserves which could be gained through total U.S. extraction of private shale and federal lands.

It also strongly adds to the advocacy of crude oil shipments abroad, currently stymied by a 1974 federal law, panicked by the Arab oil embargo at that time, while U.S. production was in sharp decline.

It’s no exaggeration to claim that maximum exports of oil, natural gas, and coal to an energy-hungry developing world could generate the revenues necessary to more than offset budget deficits. It would also bring down the U.S. Treasury debt— even as the current free-spending Administration and Congress make little effort to analyze the massive government expenditures. These indicate no end to the out-of-control spending spree, which is being indulged by America’s legislators and the indiscriminate executive order usage by the White House.

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