Nor any drop to sell.

At least that’s what they want us to believe:

The latest government records show U.S. inventories are bloated with a virtual sea of surplus crude, enough to fuel 15 million cars for a year. Inventories have grown by 26 million barrels since the beginning of the year alone.

Sounds like a lot. But those “15 million cars” are a drop in the American auto bucket: in 2006 there were 251 million registered passenger vehicles in the US, with 54% as regular cars and 40% as SUVs and pick-up trucks.

Weekly crude oil reserves as in days of supply

Weekly crude oil reserves as in days of supply

This extra inventory actually represents 25 days of supply, although the annualized average is closer to 22 days. Better than the 18 days of 2003-2004, but still a far cry from the 1980s, when supply would last 26 to 28 days.

Weekly oil reserves (excluding strategic reserves)

Weekly oil reserves (excluding strategic reserves)

In absolute numbers, today’s reserves of 350 million barrels match the normal reserves for most of the 1980s. In fact, it wasn’t until 1994 that reserves started to creep down and oscillate heavily. If we are “bloated with a virtual sea of surplus”, what would we say of those 12 years when reserves matched today’s?

Oil imports have been steady for four years while demand slumped. But global economy will eventually turn around and demand will rise swiftly. For something that springs out of the ground, one would think oil production would be able to keep up with consumer whims, but things don’t really work that way. When the demand hike happens, we might see a sudden rise on oil prices as producers scramble.

(Crude oil stats: Department of Energy)

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