Energy Prospectus

From WSJ 10/17 "Global Markets Catch the Chinese Flu" by Ruchir Sharma, head of emerging markets at Morgan Stanley: "The growth rate in Chinese demand for oil has plummeted to nearly zero this year, down from 12% in 2010. This is arguably the main reason why oil prices are down 20% from their summer peaks. The same is true for other commodities like steel and iron ore: Commodity economies like Brazil and Russia are already in or near recession". Thoughts?

The main reason the price of oil is down is the spike in the dollar. True,global demand did soften but it is still going up.

Daily domestic production added a record 944,000 barrels last year and reached a 29-year high of 8.95 million barrels this month, according to the Energy Information Administration, the U.S. Department of Energy's statistical arm.
Well Depletion
Output, much less growth, is difficult to maintain because shale wells deplete faster than conventional production. Oil production from shale drilling, which bores horizontally through hard rock, declines more than 80 percent in four years, more than three times faster than conventional, vertical wells, according to the IEA. New wells have to generate about 1.8 million barrels a day each year to keep production steady

This is why I remain bullish on the onshore drillers and sand companies.