The failure of world oil stocks to rebuild after the peak winter demand season would normally be a cause for alarm for the International Energy Agency.
And if this happened amid a backdrop of oil prices of well over $100/barrel, you might not be surprised if the IEA, the West's energy watchdog, was sounding the alarm.
But it isn't. On Tuesday the IEA's latest Monthly Oil Market Report showed that OECD oil stocks rose by just 3.8 million barrels in the between April and June, the smallest increase for the second quarter for more than 25 years.
The IEA's unexpectedly sanguine reaction to this was probably due to the fact that it is more relaxed about other fundamental factors in the oil market, not least the 20% fall in crude prices in recent weeks.
The agency said thought it thought recent tightness in crude and product supply was easing, and that demand remained sluggish, especially in the developed world.
The IEA said it believed gasoline demand in the US--in other words, demand for the biggest single product category in the world's biggest oil consumer--may have peaked in 2007. Gloomy vehicle sales figures support this theory, and the IEA said consumers were unlikely to revert to gas-guzzlers even if retail prices fall.
The IEA even went so far as to say that in the spiritual home of the automobile, motorists were looking not only at more efficient cars but were also turning in increasing numbers to public transportation and bicycles. Yes, that's right, bicycles. Proof if it were still needed of the growing impact of this year's record oil prices.
Thought this might be of interest. Auto shopping habits as of late.
From Auto trade site.
http://www.autoremarketing.com/ar/news/story.html?id=8260