Developments this week
So far oil prices have been little affected by the panic which ensued following the announcement that Greece was putting the terms of its bailout up for a national referendum. In the hours following the announcement on Tuesday oil prices fell by about $3 a barrel, but quickly recovered. NY oil closed Wednesday at $92.51 after having traded $2-3 higher for most of last week. London closed at $109.34 a barrel.

US crude stocks grew by 1.8 million barrels last week. Gasoline stocks were up by 1.4 million barrels, but distillates fell by 3.6 million, suggesting that substantial exports are still taking place. US crude imports were 9 million b/d last week, up slightly from the recent average of 8.8 million b/d. US gasoline consumption continues to falter with deliveries over the last month running about 4 percent lower than last year.

Given the vehemence of the turmoil in Europe and the increasing possibility that Greece will default in on its debt resulting in an ever-growing economic crisis, oil prices have remained remarkably strong. This suggests that demand from China may be stronger than is generally believed despite reports that Beijing’s manufacturing slowed in October.

Tripoli claims that it has oil production up to 530,000 b/d or one-third of prewar levels. Libya is having problems forming a government and many observers are predicting civil war as the various tribes- now well armed – jockey for power in a post-Gadhafi era.

Nuclear troubles
The troubles surrounding the reactors at the Fukushima No. 1 nuclear power station seem to grow worse every week. A study by the French nuclear safety institute issued a report saying that the radioactive cesium that leaked into the sea was 20 times the amount estimated by Tokyo Power. The institute also estimated that the amount of radioactive material released into the air may be double the figure in the company’s estimate.

Tokyo has undertaken a $14 billion dollar project to clean up the hot spots of radioactive contamination. Soil is being scraped off of school yards and parks and citizens are hosing off sidewalks with high radiation readings. In general nobody knows what to do with the contaminated soil and who has authority to remove it.

The shortage of electricity has led to a campaign to wrap up in warm clothing to save electricity this winter. The Kansai Electric Company is already forecasting that it will have a 9.5 percent power shortage in February.

In the meantime Belgium’s six political parties have reached agreement to close down the country’s three nuclear reactors by 2015.