Posted by: energyblogwalter | August 30, 2006

Oil prices fall as inventories rise in US :: Toronto Star August 30, 2006

Oil Prices Fall as inventories rise in US

Reserve Depleation? This is an oddity. The US like most countries have a reserve of energy in case of problems with supply. I hear it’s around 4 months (someone correct me?). Now, when their reserve drops they ask for Europe’s reserve since there are agreements to help each other.

So the question is, are the US importing the European reserves to ease summer demand? I note that the article points out that demand has not dropped but increased. This would usually mean higher prices but prices are dropping. So the supply came from somewhere, and it wasn’t the US is all I mean.

This unfortunately does us all a disservice. With lower prices there is no reason for anyone to conserve the use of fuel and demand will not abate. What is available will quickly be used. Then there will be less reserve and higher prices can only await us all.

As well we expect this approach in our fuel management. Governments are pressured to lower gas prices even as supply weakens preventing market forces from limiting demand. Without limiting demand the supply cannot but be lost more rapidly and sends the wrong signals to suburbanites to cut down their driving or find/fund alternatives. This just unfortunately delays the conversation about fuel for another while.

Anyway, it’s here now, so might want to fill up on a reserve of your own while the prices are good.

Cheers

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