The IEA’s Oil Market Report said there was a 1.4 mb/d increase in oil supply for October.
World oil supply saw a monthly gain of 1.4 mb/d in October, as non-OPEC outages receded and OPEC volumes increased. Recovery in China and Azerbaijan plus rising Russian output boosted non-OPEC supplies.
That’s a big jump in one month but they did not give the total world liquids production. In other words where did that figure take us? Was September production revised downward? In previous reports, the previous month is usually revised but this time they did not give us the figure so we will simply have to wait.
But this line was interesting: rising Russian output boosted non-OPEC supplies. Rising Russian output? Not according to the Moscow Times.
Industry and Energy Ministry data showed that Russian gas-oil exports fell by 17.4 percent from September to 81,900 tons per day, while shipments of fuel oil were down by 11.9 percent to 105,050 tons per day.
Well, to be fair, it says exports were down 17% not production. But that is one hell of a drop in exports, from the world's second largest exporter, in only one month. But one of Leanan’s links above talks about a Russian domestic fuel shortage. How can that be? Exports are down and domestic supplies are down. Yet according to the IEA production is up?
There are a few good news in this report:
- Iraq is up: 1.99 (Aug) to 2.18 mbpd (Sept) which is the biggest increase in the OPEC-12.
- OPEC-10 is up a mere 0.05 mbpd
- OPEC-12 is up 0.25 mbpd
- China demand is cooling down a little bit (5.7% growth in 2007 compared to 6.9% in 2007).
Thanks Khebab, that OPEC 10 report is very interesting. I suspected as much but thought surely they would do a little better than that. Next month will be much worse because of the maintenance work in the UAE. But data from the other nine will be critical. If they don't do better in November, a lot better, the crap will hit the fan.
I would like to be a fly on the wall at the OPEC meeting this weekend. It may go something like this: "Hey, the world is expecting us to bail them out of this damn mess. But we are producing every barrel we possibly can. What the hell are we going to do? What can we possibly say that will not make us look like we have been lying all these years?"
Well the data from Platts, MEES, the IEA, the EIA and all the others often varies wildly. OPEC's own "Monthly Oil Market Report" will be out Thursday. That will give the figures closest to what OPEC is actually producing.
That’s a big jump in one month but they did not give the total world liquids production. In other words where did that figure take us? Was September production revised downward?
Ron, I don't get the full subscriber report, but perhaps someone here does. It would be interesting to see exactly what they are suggesting that October's number was, because their September production number in last month's report was 85.1 mbpd. If they added another 1.4 mbpd to that, then October would be over 86 million bpd, shattering the previous peak (which I believe is 85.5 mpbd in July 2006).
Does anyone here get the full report, which should show the total (and we don't have to guess whether the gain is on the back of a downward September revision)?
The figures in the last report are themselves strange. From August to September, they show Chinese production increasing 170 tbpd - China's own figures show a decline of 30 tbpd (China has not yet released October figures).
I think that the Moscow Times story referred to product exports. In any case, between strong domestic demand, constantly changing export duties and basically flat crude oil production since October, 2006, the export situation in Russia is pretty uncertain from month to month.
I realize we are talking about estimates, but there are estimates and there are estimates. The end of October was only two weeks ago. This has to be a preliminary estimate. Also, note the drawdowns in inventories (note that they refer to the October inventory report as "preliminary.")
From the IEA report:
OECD industry stocks fell by 29.5 mb in September, with Japanese crude stocks falling to their lowest level in at least 20 years. Total OECD forward inventory cover fell to 52.8 days, remaining close to the five-year average. Preliminary data for October suggest a further 21 mb draw in crude and product stocks in the US, Japan and EU-16.
Yes I understand that Jeff. That is why I like the EIA data. Though they are always over two months late with their data, that gives them time to get it closer to the truth. And, as countries come in with revised data, they revise their data. The IEA never revises after the second month. The IEA preliminary data is just a wild-ass guess. I am sure they eventually get, and publish somewhere, the correct data, but just not in thir monthly Oil Market Report.
The IEA's terminology was interesting. I think that we would all agree that inventory data, especially in OECD countries, are more reliable than production data worldwide, especially in the short term.
But the IEA referred to the October inventory data (showing declining inventories) as preliminary while they made a declarative statement about October liquids production (which showed an increase).
Note that when oil inventories were rising, WT discounted the significance of this saying the OECD bloc was not significant enough to give us a true representation of the supply/demand ratio (or prove the Saudis were right), yet when they are falling, they accurately represent the state of global oil supply/demand ratios (which he then touts has proving HIM right).
That is because the OECD block represent most of the wealthiest countries, so if anybody is going to be getting oil, they are.
Unless, say, China is filling its new strategic petroleum reserves and OECD countries have high levels of stocks. In that case, OECD countries might well be content to draw down stocks in anticipation of lower prices later, allowing those who are less sensitive to market conditions - such as semi-command economies - to buy the more expensive oil.
And, given that RR's told us he personally knows OECD refiners who are drawing down stocks instead of buying expensive oil and that China's been filling its SPRs all year, that's likely to be the situation we're in.
SA continues to put on the brave face -- all your data seems to argue otherwise. From Drumbeat today`http://www.thebusiness.co.uk/news-and-analysis/351506/opec-confident-global-oil-addiction-will-grow.thtml
Opec confident global oil addiction will grow
He said the price had been driven higher by "pessimists" and "agitators" who scare the market with talk of tight demand or oil supplies having peaked. "Any pessimism results in fluctuations of markets. The role of speculators has been a big factor," the minister said.
Who are the "pessimists?" Is the OilDrum the cause of the increase in oil prices? Hardly seems likely.
Ali Al-Naimi said the market is well supplied with oil, but "pessimists" like peak oil theorists and hedge funds are pushing it up to unwarranted levels.
Yep, I laugh when they accuse little us of driving the price up when it would be 'sooo easy' for them to prove us wrong by ramping global C + C production to 100 million barrels per day plus allow fully independent oilfield auditing to shut us up. C'mon, IOCs & NOCs: drive supply up so the price goes down soon to $10/bbl again--I dare ya!
They could also change their TV commercials to show how easy it is find and produce oil by filming lots of Joe Sixpacks regularly finding some bubblin' crude in their backyards.
But 'noooo', the TV ads feature filmshots of super-expensive, miles offshore drill-rigs, and how many Eiffel Tower equivalents they go down to find increasingly smaller fields. Any viewer with a braincell in their head, upon seeing this commercial--> Has Got to be CONCERNED. Thus, I think the oil producers are doing an excellent job of scaring the crap out of informed consumers and investors/speculators--far more than our dry text and statistical tables. /rant off
re: "Any viewer with a braincell in their head, upon seeing this commercial--> Has Got to be CONCERNED"
Brief comment from the non-TV person here:
Actually, no. First off, TV is processed differently than are other ways of absorbing info, such as reading. (My personal hypothesis. I think this might be in Jerry Mander's book, though.)
Second, how long is anything- (I mean anything)- retained? By this I mean, how long - in the context of TV-watching, where the viewer receives rapid changes in content. Information has to be retained in order to be reflected upon, let alone questioned.
Here you are calling on people to take the "information" presented - the fantastic technological achievements and the beautiful photography - and put it into another context. One which allows the question to be formulated. (more on this in a moment).
Third, what *is it* that is retained? My hypothesis is that it is primarily emotional content. The emotional message here is:
1) We have fantastic technologies that reflect brainpower and invention far beyond your understanding.
2) Aka, we are wizards (more or less).
3) We (the wizards) have it all under control.
4) Don't worry 'bout a thing.
5) In addition, and this is a bit more difficult to describe, but...the massive amounts of machinery, the distances traveled, the feats of derring-do - the energy required for all this is taken for granted. It is assumed to be a natural part of the natural, human background of action. (Or, part of the human/wizard repertoire. Nothing that might be in any way contingent on anything else...certainly nothing that is *itself* contingent upon the availability of "cheap fossil fuels".)
Fourth, back to context. The context that would allow for - let alone logically lead to - the conclusion to be CONCERNED is simply not the context of the viewer.
It is Bob's context. Not that of the average viewer.
So, I reach the opposite conclusion.
My opinion is that the "oil producers" are not at all conveying concern, let alone fear.
If they do manage to get a little across, as in the extremely (IMVHO) disingenuous Chevron ads, it is only as a lead-in to even more of the above. (See points #1-4).
There is no "informed consumer". The longer the consumer watches TV (probably no matter what the content, again IMVHO) - the more precious seconds and years go by that are lost to any kind of learning (or even socializing, for that matter.)
The best thing the consumer could do is hide the TV in the closet for, say, three weeks. And see what happens.
When do the Saudis and MSM get hung more like! ... oil production has actually peaked ... how dare he say otherwise and the MSM just quote him without giving the actual facts?
"He said the price had been driven higher by "pessimists" and "agitators" who scare the market with talk of tight demand or oil supplies having peaked."
Folks, I am afraid I have a confession to make. I hate to say this, but I did it; I'm the guy that has been SO agitated and pessimistic that I accidentally drove up the price of oil. Now, I didn't mean to do it. Really! It's just my attitude. My mom always told me, she said "SubKommander Dred, you better improve your attitude or you'll drive up the price of oil! Just you wait until your father gets home!"
Is it just me, or does Ali Al-Naimi sound a bit like some redneck Sheriff from Mississippi during the civil rights days, blaming all his problems on 'outside agitators' coming down south and stirring up all the colored folk?
Ali Al-Naimi said the market is well supplied with oil, but "pessimists" like peak oil theorists and hedge funds are pushing it up to unwarranted levels.
He also said high cost producers like Canada's oilsands are contributing to the high price of oil.
But Mr. Al-Naimi, what about the old economic adage: "We may have run out of $30 oil but we have plenty of $70 oil" which is exactly what is happening in Canada! In addition, $80+ oil has open new possibilities for Saudi Arabia:
Ali Al-Naimi said the market is well supplied with oil, but "pessimists" like peak oil theorists and hedge funds are pushing it up to unwarranted levels.
Perhaps Mr. Ali Al-Naimi was refering to agitator and peak-oilist George Bush, who quite recently said
"I believe oil prices are going up because the demand for oil outstrips the supply for oil. Oil is going up because developing countries still use a lot of oil. Oil is going up because we use too much oil. And the capacity to replace reserves is dwindling. That's why the price of oil is going up."
Yes the market is well supplied. You heard it from the top.
It's perfectly true that we have run short of $30 oil, but we have plenty of $70 oil! But the pertinent question is what flow rate does this $70 oil come out of the ground at? It's quite a bit slower than 85 million barrels each day and will be forever. This kind of basic point is somehow missed by all the detractors of peak oil who throw around the big quasi oil reserve figures. But Hubbert's math puts a pretty accurate guage on this and all the factors. We could magically triple the amount of $100+ oil that's in the ground, and it probably would not move the peak date enough to change energy policy one bit.
re: "But the pertinent question is what flow rate does this $70 oil come out of the ground at? It's quite a bit slower than 85 million barrels each day and will be forever. This kind of basic point is somehow missed by all the detractors of peak oil who throw around the big quasi oil reserve figures."
Maybe the difference is covered by a rise in exports in refined products?
Russia has for long time increased its tax burden for crude oil exports in order to stimulate exports of higher value added products instead. Maybe October was a day for another tax hike? It should be somewhere in the news - 17% drop without a major disruption event is way too much for a single month.
I think month to month quality of data is severely compromised especially if the month has just passed.
IMO the thing to watch short term are crude stocks. To get a hold on the PO picture we would have to watch yearly averages, at least for a 5 year period. This event simply does not develop with a month to month speed.
The IEA’s Oil Market Report said there was a 1.4 mb/d increase in oil supply for October.
That’s a big jump in one month but they did not give the total world liquids production. In other words where did that figure take us? Was September production revised downward? In previous reports, the previous month is usually revised but this time they did not give us the figure so we will simply have to wait.
But this line was interesting: rising Russian output boosted non-OPEC supplies. Rising Russian output? Not according to the Moscow Times.
Russian Oil Exports down 17% in October
Well, to be fair, it says exports were down 17% not production. But that is one hell of a drop in exports, from the world's second largest exporter, in only one month. But one of Leanan’s links above talks about a Russian domestic fuel shortage. How can that be? Exports are down and domestic supplies are down. Yet according to the IEA production is up?
What is going on here?
Ron Patterson
There are a few good news in this report:
- Iraq is up: 1.99 (Aug) to 2.18 mbpd (Sept) which is the biggest increase in the OPEC-12.
- OPEC-10 is up a mere 0.05 mbpd
- OPEC-12 is up 0.25 mbpd
- China demand is cooling down a little bit (5.7% growth in 2007 compared to 6.9% in 2007).
Thanks Khebab, that OPEC 10 report is very interesting. I suspected as much but thought surely they would do a little better than that. Next month will be much worse because of the maintenance work in the UAE. But data from the other nine will be critical. If they don't do better in November, a lot better, the crap will hit the fan.
I would like to be a fly on the wall at the OPEC meeting this weekend. It may go something like this: "Hey, the world is expecting us to bail them out of this damn mess. But we are producing every barrel we possibly can. What the hell are we going to do? What can we possibly say that will not make us look like we have been lying all these years?"
Ron Patterson
It looks like Iraq is saving the day again for OPEC in October also (+0.11 mbpd)!
Well the data from Platts, MEES, the IEA, the EIA and all the others often varies wildly. OPEC's own "Monthly Oil Market Report" will be out Thursday. That will give the figures closest to what OPEC is actually producing.
Ron Patterson
Do the numbers represent all production, just exports, or exports not including deals?
I suspect they are production numbers (crude oil + condensate).
Add some more data to your November production forecast:
UAE to lose more than 800,000 barrels of oil per day during peak of November oilfield maintenance
On the other hand the UAE is supposed to have increased production following the maintenance.
Are you saying you believe this?
Seems like a bunch of lies?
That’s a big jump in one month but they did not give the total world liquids production. In other words where did that figure take us? Was September production revised downward?
Ron, I don't get the full subscriber report, but perhaps someone here does. It would be interesting to see exactly what they are suggesting that October's number was, because their September production number in last month's report was 85.1 mbpd. If they added another 1.4 mbpd to that, then October would be over 86 million bpd, shattering the previous peak (which I believe is 85.5 mpbd in July 2006).
Does anyone here get the full report, which should show the total (and we don't have to guess whether the gain is on the back of a downward September revision)?
Thanks, RR
Apparently Khebab does as the details he gives above were not in the Highlights.
Ron Patterson
No I don't but I think Rembrandt does :)
The figures in the last report are themselves strange. From August to September, they show Chinese production increasing 170 tbpd - China's own figures show a decline of 30 tbpd (China has not yet released October figures).
Ron,
I think that the Moscow Times story referred to product exports. In any case, between strong domestic demand, constantly changing export duties and basically flat crude oil production since October, 2006, the export situation in Russia is pretty uncertain from month to month.
Ron,
I realize we are talking about estimates, but there are estimates and there are estimates. The end of October was only two weeks ago. This has to be a preliminary estimate. Also, note the drawdowns in inventories (note that they refer to the October inventory report as "preliminary.")
From the IEA report:
Yes I understand that Jeff. That is why I like the EIA data. Though they are always over two months late with their data, that gives them time to get it closer to the truth. And, as countries come in with revised data, they revise their data. The IEA never revises after the second month. The IEA preliminary data is just a wild-ass guess. I am sure they eventually get, and publish somewhere, the correct data, but just not in thir monthly Oil Market Report.
Ron Patterson
The IEA's terminology was interesting. I think that we would all agree that inventory data, especially in OECD countries, are more reliable than production data worldwide, especially in the short term.
But the IEA referred to the October inventory data (showing declining inventories) as preliminary while they made a declarative statement about October liquids production (which showed an increase).
Note that when oil inventories were rising, WT discounted the significance of this saying the OECD bloc was not significant enough to give us a true representation of the supply/demand ratio (or prove the Saudis were right), yet when they are falling, they accurately represent the state of global oil supply/demand ratios (which he then touts has proving HIM right).
That is because the OECD block represent most of the wealthiest countries, so if anybody is going to be getting oil, they are.
Unless, say, China is filling its new strategic petroleum reserves and OECD countries have high levels of stocks. In that case, OECD countries might well be content to draw down stocks in anticipation of lower prices later, allowing those who are less sensitive to market conditions - such as semi-command economies - to buy the more expensive oil.
And, given that RR's told us he personally knows OECD refiners who are drawing down stocks instead of buying expensive oil and that China's been filling its SPRs all year, that's likely to be the situation we're in.
SA continues to put on the brave face -- all your data seems to argue otherwise. From Drumbeat today`http://www.thebusiness.co.uk/news-and-analysis/351506/opec-confident-global-oil-addiction-will-grow.thtml
Opec confident global oil addiction will grow
Who are the "pessimists?" Is the OilDrum the cause of the increase in oil prices? Hardly seems likely.
Yes, he means us!
Oil price set by market, not OPEC: Saudi minister
Quiet! You're talking the price of oil up.
What amazing power you folks have!
Yep, I laugh when they accuse little us of driving the price up when it would be 'sooo easy' for them to prove us wrong by ramping global C + C production to 100 million barrels per day plus allow fully independent oilfield auditing to shut us up. C'mon, IOCs & NOCs: drive supply up so the price goes down soon to $10/bbl again--I dare ya!
They could also change their TV commercials to show how easy it is find and produce oil by filming lots of Joe Sixpacks regularly finding some bubblin' crude in their backyards.
But 'noooo', the TV ads feature filmshots of super-expensive, miles offshore drill-rigs, and how many Eiffel Tower equivalents they go down to find increasingly smaller fields. Any viewer with a braincell in their head, upon seeing this commercial--> Has Got to be CONCERNED. Thus, I think the oil producers are doing an excellent job of scaring the crap out of informed consumers and investors/speculators--far more than our dry text and statistical tables. /rant off
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Bob,
re: "Any viewer with a braincell in their head, upon seeing this commercial--> Has Got to be CONCERNED"
Brief comment from the non-TV person here:
Actually, no. First off, TV is processed differently than are other ways of absorbing info, such as reading. (My personal hypothesis. I think this might be in Jerry Mander's book, though.)
Second, how long is anything- (I mean anything)- retained? By this I mean, how long - in the context of TV-watching, where the viewer receives rapid changes in content. Information has to be retained in order to be reflected upon, let alone questioned.
Here you are calling on people to take the "information" presented - the fantastic technological achievements and the beautiful photography - and put it into another context. One which allows the question to be formulated. (more on this in a moment).
Third, what *is it* that is retained? My hypothesis is that it is primarily emotional content. The emotional message here is:
1) We have fantastic technologies that reflect brainpower and invention far beyond your understanding.
2) Aka, we are wizards (more or less).
3) We (the wizards) have it all under control.
4) Don't worry 'bout a thing.
5) In addition, and this is a bit more difficult to describe, but...the massive amounts of machinery, the distances traveled, the feats of derring-do - the energy required for all this is taken for granted. It is assumed to be a natural part of the natural, human background of action. (Or, part of the human/wizard repertoire. Nothing that might be in any way contingent on anything else...certainly nothing that is *itself* contingent upon the availability of "cheap fossil fuels".)
Fourth, back to context. The context that would allow for - let alone logically lead to - the conclusion to be CONCERNED is simply not the context of the viewer.
It is Bob's context. Not that of the average viewer.
So, I reach the opposite conclusion.
My opinion is that the "oil producers" are not at all conveying concern, let alone fear.
If they do manage to get a little across, as in the extremely (IMVHO) disingenuous Chevron ads, it is only as a lead-in to even more of the above. (See points #1-4).
There is no "informed consumer". The longer the consumer watches TV (probably no matter what the content, again IMVHO) - the more precious seconds and years go by that are lost to any kind of learning (or even socializing, for that matter.)
The best thing the consumer could do is hide the TV in the closet for, say, three weeks. And see what happens.
If you're concerned about socializing, hide the TV in the closet AND ban access to TOD. Both are addictive :)
when do we get hung from lamp posts for defeatism?
When do the Saudis and MSM get hung more like! ... oil production has actually peaked ... how dare he say otherwise and the MSM just quote him without giving the actual facts?
Bizarre!
Xeroid.
See downfall:
http://en.wikipedia.org/wiki/Der_Untergang
The Chain Dogs and Golden Pheasants always get to hang the Civvies...
Thats the way it works :-(
We're emboldening the speculators.
"He said the price had been driven higher by "pessimists" and "agitators" who scare the market with talk of tight demand or oil supplies having peaked."
Folks, I am afraid I have a confession to make. I hate to say this, but I did it; I'm the guy that has been SO agitated and pessimistic that I accidentally drove up the price of oil. Now, I didn't mean to do it. Really! It's just my attitude. My mom always told me, she said "SubKommander Dred, you better improve your attitude or you'll drive up the price of oil! Just you wait until your father gets home!"
Is it just me, or does Ali Al-Naimi sound a bit like some redneck Sheriff from Mississippi during the civil rights days, blaming all his problems on 'outside agitators' coming down south and stirring up all the colored folk?
SubKommander Dred
But Mr. Al-Naimi, what about the old economic adage: "We may have run out of $30 oil but we have plenty of $70 oil" which is exactly what is happening in Canada! In addition, $80+ oil has open new possibilities for Saudi Arabia:
Saudi billionaire buys first A380 'Flying Palace'
Perhaps Mr. Ali Al-Naimi was refering to agitator and peak-oilist George Bush, who quite recently said
"I believe oil prices are going up because the demand for oil outstrips the supply for oil. Oil is going up because developing countries still use a lot of oil. Oil is going up because we use too much oil. And the capacity to replace reserves is dwindling. That's why the price of oil is going up."
Yes the market is well supplied. You heard it from the top.
The old adage, when one door closes, another one opens. In this case, complete with royal jesters.
Besides, oil prices are now falling like a stone (almost $4.0!) so obviously OPEC/Saudi Arabia has still a lot of influence on the market direction.
I think the team that does US employment numbers has been assigned to help the Oil industry cook the books.
The housing industry is still adding employee's according to the US government.
It's perfectly true that we have run short of $30 oil, but we have plenty of $70 oil! But the pertinent question is what flow rate does this $70 oil come out of the ground at? It's quite a bit slower than 85 million barrels each day and will be forever. This kind of basic point is somehow missed by all the detractors of peak oil who throw around the big quasi oil reserve figures. But Hubbert's math puts a pretty accurate guage on this and all the factors. We could magically triple the amount of $100+ oil that's in the ground, and it probably would not move the peak date enough to change energy policy one bit.
Hi net,
re: "But the pertinent question is what flow rate does this $70 oil come out of the ground at? It's quite a bit slower than 85 million barrels each day and will be forever. This kind of basic point is somehow missed by all the detractors of peak oil who throw around the big quasi oil reserve figures."
Very well said.
Maybe the difference is covered by a rise in exports in refined products?
Russia has for long time increased its tax burden for crude oil exports in order to stimulate exports of higher value added products instead. Maybe October was a day for another tax hike? It should be somewhere in the news - 17% drop without a major disruption event is way too much for a single month.
Global Peak Oil Production: 86.13 M/bpd
Source: http://europe.theoildrum.com/node/3087
September Global Oil Production: 85.1 M/bpd
Source: http://europe.theoildrum.com/node/3087
October Global Oil Production: 85.1 + 1.4 = 86.5 M/bpd
Source: http://www.theoildrum.com/comment/reply/3235/262987
If this is true, we have a new peak in global oil production. Let the fun begin!
I think month to month quality of data is severely compromised especially if the month has just passed.
IMO the thing to watch short term are crude stocks. To get a hold on the PO picture we would have to watch yearly averages, at least for a 5 year period. This event simply does not develop with a month to month speed.