The following numbers were pulled from the October 2005 report from the Energy Information Administration:

Total worldwide oil demand:
2004 - 82.5 million barrels per day
2005 - 83.7 million barrels per day
2006 - 85.6 million barrels per day

Total worldwide oil supply:
2004 - 83.0 million barrels per day
2005 - 84.3 million barrels per day
2006 - 85.5 million barrels per day

As readers of this blog are aware, I think buyers of energy stocks are current prices will be handsomely rewarded. Most are down 20% or more this month alone. ConocoPhilips (COP) has forward P/E of 6.4x. Occidental (OXY) is 7x. Plains (PXP) is 8x.

It is true that dramatic commodity price erosion from here would put these estimates in jeopardy, and therefore make these P/E's irrelevent. However, when I see numbers like the ones from the EIA, along with $60 oil and $13 natural gas today, I tend to think the reaction right now on Wall Street is out of line. We'll just have to wait and see.