Zman's First Quarter Wrap-Up

Without question "Zman" provides the best analysis of the oil and gas industry.

His most recent posting, a wrap-up of the first quarter, is superb.

In a fairly long post, these two paragraphs caught my attention:

• On the international front, supply from Saudi is offsetting supply from Libya. However, a barrel is not a barrel is not a barrel .....

• Non-OPEC supply probably won't be as resilient as EIA currently expects (up a fraction of a percent this year and then down again in 2012) .... 

I would love to "cut and paste" the entire paragraphs but I think it's better if you visit his site.

With regard to Saudi Arabia, the world my get a better feeling whether OPEC can respond to a prolonged loss of sweet oil from Libya. Already there are indications that Saudi's spare capacity is declining. 

In his non-OPEC paragraph he notes that a) Brazil is too far off to make a difference in the near term; b) Mexico is one day closer to becoming a net importer of oil; c) the UK is pushing the envelope by threats to increase taxes on North Sea oil; and, d) the American "moratorium" continues.

One almost wonders if investors moved the needle today -- oil up over $108 -- after reading Zman's analysis.

When I read articles like this most recent posting from Zman, all I can think of is a lost decade when our brightest engineers could have been working on coal to liquids technology rather than on wind and solar. It did not take computer modeling to understand that neither wind nor solar could make more than a small dent in the world's energy requirements.