The following was posted on the front page, first paragraph of the International Energy Agency’s website:

“Global oil product demand is revised up to 84.5 mb/d for 2006 and 86.1 mb/d for 2007 (revisions of +250 kb/d and +420 kb/d, respectively). This results from baseline adjustments for non-OECD countries and also has the effect of reducing the miscellaneous-to-balance. World demand is now estimated to rise by 2.0% or 1.7 mb/d in 2007.

May world supply fell by 565 kb/d to 84.9 mb/d. Seasonal OECD stoppages compounded weaker OPEC crude supply, notably in Nigeria, where outages are near 800 kb/d. Non-OPEC 2007 output is trimmed by 110 kb/d to 50.2 mb/d, with growth of 0.9 mb/d this year." – IEA, June 25, 2007

OK, if oil “demand” is to increase by 420,000 bpd and “supply” has been falling by 200,000 bpd over the past 2 years… it doesn’t take too much on gray matter (spelling “gray” gives me away as an American) to figure out that there must be inventories out there that are being drawn down… and either supply increases to meet demand or price increases to dampen demand… Any questions?

Yours for a better world,

Mentatt (at) yahoo (dot) com