Inventories

U.S. Crude oil inventories peaked this year in the week ending 7/6/07 at 352,580,000 barrels.

For the week ending 11/30/07 U.S. crude inventories stood at 305,240,000 barrels.

In 5 months U.S. inventories declined 11% (peak to trough).

Each week our friends (with friends like these who needs an enema?) in the media report the inventory decline of the week with an explanation:

• Bad weather delayed offloading of ships
• Storms in the Gulf of Mexico delayed oil deliveries
• Falling Demand (my personal favorite)
• Refinery Outages (???)
• My dog ate my inventory homework


Guys, guys, guys… I know that whatever journalism school you attended was long on style and short on statistics but even a journalist can see a trend forming here: you know, rising prices and declining inventories. You folks are supposed to be experts at ferreting out the truth, and though you have proven quite adept at calling politicians for what they are, you seem to have gone tone deaf, or your B.S. meter is on the blink, when the party at the microphone is an oil executive or Wall Street analyst/CEO. After all, these are our “best and brightest”. Look at the great job they did when they conceived the idea of mortgage-backed securities!

Of course, during this time prices rose over 40% (and rose over 800% over the past 8 years) and was again explained as:


• Demand from China and India is driving prices higher (give that journalist a cigar)
• International Politics
• Terrorism
• The decline in the value of the U.S. Dollar
• Greedy oil companies
• U.S. Energy Policy
• Greedy Speculators

In the land of the free market, maybe it is the consumer that is responsible for the price response of the supply demand equation. Did that one ever dawn on you? Maybe, just maybe, the same force is working upon the value of the dollar versus commodities, like oil for instance. Ya think?

Yours for better journalism covering the most important issue since Noah built himself a boat.

Mentatt (at) yahoo (d0t) com