OIL PRICE: SUPPLY, DEMAND OR BOTTLENECK?

This is something the guys at The Oil Drum have been yelling about for some time now. The available oil supply is falling short of demand. Peak Oil? Yes. Peak Oil Now? Well, that depends on how you define Peak Oil. The IEA says this problem is at the refineries, not in the wells.

International Energy Agency seeks rise in US oil refining capacity
July 2, 2007 (AFP via Yahoo News)

WHO
Claude Mandil, director, International Energy Agency (IEA)
Its really pretty basic... (click to enlarge)

WHAT
Mandil is urging US refineries to bump up capacity in anticipation of increased demand.

WHEN
Demand is expected to grow in the 3rd quarter of this year due to “summer driving.”

WHERE
Supply, especially “throughput” from U.S. refineries is not adequately increasing.

WHY
U.S. market traders report rising oil demand and a tightening supply.
Prices have broken the $70/barrel mark and are heading for $75.
IEA is urging OPEC to up production.
...because demand is only going one way. (click to enlarge)

QUOTES
Mandil: "We are a little bit concerned about the world situation right now…Our other concern is that product stocks are low in many developped countries. There will be a need to process a lot of crude…During the past week, we were disappointed to see that many refineries, particularly in the US, seemed not to be able to process [sufficient quantities of crude oil]…”