re: The same kind of projection shows US imports pretty much disappearing by 2018, which would dramatically improve the US's balance of trade and economy.

There are a couple of problems with projecting that trend into the future. First of all, there are limits to how far the US can improve its energy efficiency without drastically restructuring American society (e.g. replacing freeways with electric trains), and second, the increase in production is not backed up by reserves in the ground. US oil reserves have been falling fast, and if production rates continue, the current 19 billion barrels of proven reserves will be almost exhausted by 2018.

The US needs to find a lot of new oil soon to replace its consumption, and based on the latest deepwater disaster in the Gulf of Mexico, I don't think the prospects are good. Obama's plan to open up the offshore to drilling is going to become a lot less popular when that oil slick hits the Louisiana coast.

Might as well add this while I'm at it.

Given the C02 data and the fact that heating oil had to be a significant contributor we can wonder what real US heating oil storage levels where.

First of course the propaganda piece it not even worth calling it wrong.

Next I happen to agree with import data as its easy to get and hard to hide a lot of people have access to real imports counting VLCC's or product imports is not that hard.

Distillate imports fit very well with the C02 data and make a lot of sense.
However if you think about it a bit they also have a interesting signature looking a lot like and emergency import scenario. One can imagine what would have happened if the US was caught in a serious heating oil shortage while claiming to be amply supplied. A dire emergency that no one knows about.

In any case it allows us to pin the real distillate levels since the import surge would have started as we approached MOL. This would put real distillate storage levels very close to MOL and well below the five year trend instead of ridiculously above it.

If one takes a look at the trucking index.

http://www.calculatedriskblog.com/2010/04/ata-trucking-index-increases-i...

We can see trucking also has picked up substantially.

This suggests that the US is probably still fairly tight in distillates. Later on if this trend continues and as spring planting starts I suspect things will remain tight.

Despite this distillate imports have fallen off sharply which further supports the argument that it was a serious emergency move that probably left Europe in and uncomfortable position.

One looks at US distillate production which is a iffy number not bogus but also not completely trustworthy in general I trust the trend and wonder about the amount.

One can see support for the US desperately trying to rebuild its distillate stocks.

Last but not least if my analysis is correct no way has the US used the total amount of oil it claims to have used. The number is seriously off to the tune of 500kbd to 1mbd. Assuming oil imports are trustworthy same as distillates. Obviously US domestic production claims must be a complete farce.

We are not in great shape but also not on MOL. Assuming that oil storage level was low when we drew heating oil down to the point of emergency imports suggests that the US is probably ok on crude oil. One generally needs to simply shift the bogus numbers down.

My best guess on oil is it now sitting slightly below the five year range.

However just to finish up we have a big problem still looming.

Gasoline imports are dying. I've blogged in the past about double export land and the Achilles heal of the US is when we can't get the gasoline imports. So far it looks like that time is upon us. I'd have to imagine we may see emergency imports similar to what we got with heating oil however it should exhibit the same sharp signal. Given the situation with distillates and probably gasoline it makes sense that the US is focusing on strait oil imports and local refining as we are basically short of everything however the knob if you will is going to have to be kept towards distillates in my opinion and should result in a crisis in gasoline looming over the next several months.

And back to oil imports if they are also a bit of and emergency situation then we may well see them begin to taper off as one can suspect that some of the surge was from oil stored at sea not real production.

My best guess is that this is indeed the case and over the next several weeks perhaps a month they will indeed taper off. Shortly after I expect a surge in gasoline imports say in 2-3 months. After that things get really interesting.

On the price side given all of this I'd say oil trades in a 80-90 band over the next month with things potentially getting interesting fast depending on how oil imports go a July crisis seems to be in the cards.

And as a final note most of the driving in the summer is discretionary if we really are attempting to manage a looming oil crisis then doing your best to get it to hit non-essential driving after the crops are in is a good move.

I'm by no means claiming that the US is attempting to manage a real oil shortage issue :) But if it was then doing your best to get through the winter and spring planting season before oil prices take off makes a lot of sense.

So what do you think the CO2 half-life in the atmosphere is anyways ????

US snow storms were linked to the melting of the Arctic summer sea ice

Impact of Arctic sea ice loss on atmosphere
http://www.arctic.noaa.gov/future/heat.html
http://www.arctic.noaa.gov/future/impacts.html

If you find older articles from the Chinese they where talking about resting their old fields and capping production and peaking back in 2003-2004.

http://www.chinadaily.com.cn/en/doc/2004-01/06/content_296195.htm

Production at the oil field, China's largest, hit a 27-year low last year.

Despite attempts to raise the field's proven crude reserves by 30 million tons in 2004, from 10 million tons last year, it won't be easy to convert the new reserves into production quickly, the official said.

He attributed the fall in output to "the natural decline of recoverable oil reserves" after 40 years of intensive production. In 2003, Daqing's crude production fell 3.5% on year to 48.4 million tons.

The fall in Daqing's crude output will seriously reduce PetroChina's crude exports to Japan. The field is owned by PetroChina, China's largest oil and gas company.

Later of course the field seems to have staged a miraculous recovery however assuming that they where telling the truth back when prices for oil where reasonably low it seems the decline rate was pretty steep.

What this means for China is that a significant amount of the increase in imports is probably going to offset declining domestic production not for real growth.

China is not a alone in leveraging claims of rapid growth to hide falling domestic oil production Saudi Arabia takes the prize in this regard.

What it does mean is that WT's export land model is somewhat skewed because some of the claim of increased consumption is really simply falling production. This is in my opinion very important as it means real consumption growth is almost certainly a lot saner and less elastic than whats claimed.

As far as actual consumption goes well having spent a month in India I'd argue that people have really messed up estimates of consumption changes. In general everyone assumes that people buy a car and immediately adopt American driving habits. This is not even close to the true situation. Indeed I found that in general Indians used gasoline like we claim the US should rarely driving and using very fuel efficient cars and public transport. Only the higher level managers and executives practiced American driving habits. In Bangalore all the engineers that had cars had motorcycles also. The driving environment can best be described as perhaps the Bronx or some run down part of New York. Even if you want to drive where are you going to park ?

Next another thing that struck me while I was India that I missed in China is the fact your seeing concentration changes for the population as the main cities boom the countryside and smaller cities are losing population. For every increase in the larger cities other regions with less wealth are seeing a loss. Its not like the major cities are booming and the countryside is seeing a steady increase in oil consumption. Certainly its easier to count oil consumption as it concentrates in the major cities but you have to subtract the fact that the people are not staying home and using oil in their old home towns. In general your probably seeing oil consumption fall outside the larger cities as the younger people leave.

Next of course again even if you buy a car it does not mean your oil consumption went from zero to US levels. Anyone with enough money to purchase a car made extensive use of taxi's and autos/put puts before they purchased a car. They where not walking around barefoot. So you have to subtract the oil production profile of a fairly wealthy person using taxi's vs driving a car. Indeed anyone that owns a car in India becomes a taxi driver for the family or lends his car to family members this private taxi service simply replaces the use of public taxi's in many cases with no net gain. Indeed because the taxi does not have to drive to pick up a person empty and in general the taxi's are a bit larger than private cars its probably more fuel efficient.

I mention India but the same scenario applies to China thus increases in purchases of new very fuel efficient cars which is happening in both countries simply does not add up to the claimed increases in fuel usage.

Now I'm not saying that fuel usage is not increasing in these countries simply saying everything I saw suggest that magnitude of the increase is substantially lower then what people claim. Direct observation of what was really happening and a bit of thought suggests that the real increase is fairly small.

Right now its very popular to separate out the OECD economies from the developing world. OECD oil consumption has been flat to falling for years many of these showing very nice growth in GDP. So OECD economies have been able to show nominal growth with little or no increase or even declining oil consumption.

I found absolutely no reason to make this distinction between countries it simply was not there on the street if you will. There was no compelling difference between India's economy and the US's for example outside of India being significantly more efficient with its oil usage.

Last but not least one can readily look at road construction and congestion to get and idea of how many cars can actually move through these dense cities. In general road construction has lagged well behind the rate of auto purchases and these cities have basically always been heavily congested you literally simply cannot increase the throughput of cars that much regardless of how many people buy as its almost constant gridlock already. Anyone with experience with city planning and road planning can easily calculate how many cars can be handled by a given road system before its saturated even if you include significant splitting of lanes etc you have to add in the large number of buses and truck also on the road in these cities. My point is that without massive American style sprawl the road systems result in a hard limit to how much traffic can flow.

the second wave of mortgage problems arises

Have you seen good, recent data? I heard a lot about this a year of two ago, but very little lately. The US Case-Schiller price index reports home prices recovering, and mortgage rates are at historic lows, so the current ARM resets may be relatively harmless.

I seriously wonder if they're ignorant or just hoping no one will call them on this and point out the cliff they're driving us to still.

No one is at the wheel. The Govt. has committed itself to so many expenditures, there isn't one politician willing to come right out and talk about wholesale cuts. Right now it's a game they're all playing to see who will blink first. Since there seems to be no problem borrowing (or is it printing more?), they just keep going forward, like you say to a cliff.

Here's a perfect example: They steal social security revenue above what must be paid out. I say steal, because it's under the guise they are borrowing the money. Who are they kidding? The only way it can be paid back is by us, the masses, so in a sense we are borrowing our national retirement fund to pay for the things they approved. I never agreed to have my retirement stolen - no one did, and we all get to vote, but it makes no difference.

You'll notice whenever the topic of cuts comes up, they futz around with microbrial things of a few million here and there. Oh, we cut the spores & fungus fund - that's a savings of 1.5 million dollars! But wait a minute, isn't the deficit this year 1.5 trillion?

I suppose we are powerless to do anything about it, except wait for the inevitable point when it no longer works and that forces hard changes.

According to Robert Rapier, the Saudis observed rising storage levels, and were terrified that high prices were about to crash, as has happened many times in the past. So, they reduced production to prevent the expected price crash.