Looking back on 2011, here are some crude oil stats from the Wall Street Journal:
- High for crude was $113.93 a barrel on 4/30/2011 when U.S. forecasts were still at 3%+ for GDP, China continuing to grow, and the world sanguine about any issues with the euro.
- Low was $75.67 on 10/5/2011, with GDP forecasts cut, downward revisions in third quarter and full year corporate earnings, lowered guidance for 2012, issues with China on the front page, and attitudes about the euro now mentioning breakup of the EU.
- Closing 2011 crude price on 12/31/2011 was $98.83!
In the EIA short-term energy outlook published on December 6th, worldwide consumption of crude oil and liquid fuels was projected to grow modestly in 2011 over 2010, to 88.1 million barrels per day ("mbd") from 87.1 mbd. In this 2011 worldwide total, OECD consumption was projected to decline by 0.4 mbd and remain relatively flat in 2012. With European recession likely in the cards, it would be reasonable to expect revised 2012 projections of OECD oil and liquid fuels consumption to decline year-over-year rather than remaining flat.
Most of the 2012 growth in crude oil and liquid fuel consumption was said to be driven by Chinese demand, which should now moderate because of reduced export demand in its major markets, which should lower oil usage by the Chinese export sector.
U.S. liquid fuel consumption was projected to increase by 0.6% to 19 mbd in 2012 in the December 6th forecast. It would seem as if there should be some downward revision here also.
Supply constraints at OPEC don't seem significant, and such as they are, they would be offset by Libyan capacity reentering the export market in late 2012.
We're still looking for reasons why the consensus 2012 oil prices shouldn't be closer to $80ish than $100+ for 2012. The revised EIA short-term projections are due out in mid-January. Keep those cards and letters coming.