The Oil Drum:

"The news from Mexico just continues to get worse with bad news from all three of their biggest oil fields, even as our perennial cornucopian talks of “a Mexican surprise.” As Gregor noted recently (h/t ft energysource) at the beginning of the year Cantarell was producing 862,000 bd and at the end of July this was down to 588,000 bd. The graph plotting decline continues to show a linear decent at the rate of 35,000 bd per month or roughly 100,000 bd every three months – giving it just 17-months at that rate (ending right at the end of next year) until there is nothing left. Somewhere in there the drop is likely to stabilize, but suddenly and soon the questions as to where the replacement hundreds of thousands of barrels are going to come from is going to stop being an almost academic exercise."

My comment: Of course US consumers and politicians are asleep at the wheel on this one. However readers of this blog should be well poitioned in non-US oil companies and will do exceptionally well as the drop in exports from Mexico is made up with higher priced crude oil from the rest of the world. If you thought $147 per barrel was high last year just wait. As the world economy recovers and runs into declining world crude production I expect oil to move relentlessly higher and exceed the old highs. What will be funny to watch is how the Obama administration responds by blaming the "evil oil companies". This will just make the problem even worse. That is why I advise buying non-US oil companies.

John Polomny
The Real Deal