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333 comments on DrumBeat: November 13, 2007
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333 comments on DrumBeat: November 13, 2007
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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.
You may be right, but they're going to be hard pressed to revise the numbers down half a million barrels per day for the old peak to stand. And with the planned 600,000 bpd maintenance being over in a couple of weeks, December might be even higher than October!
Edit: Further correlation between these production figures: stock draw downs. If demand really is 88 million bpd, and we really did produce 86.6 million bpd, we should see a global drawdown of around 40 million barrels, most of that in OECD stocks right?
http://www.smartmoney.com/news/on/index.cfm?story=ON-20071106-000494-1115
The higher output in the fourth quarter will result in a smaller-than-expected global drawdown in oil inventories in the period, EIA said. Fourth-quarter stocks are now expected to drop at a rate of 1.57 million barrels a day, down from 1.82 million barrels a day in the October forecast. In the fourth-quarter 2006, global stocks declined at a rate of 960,000 barrels a day.
Uh oh...
I think there will be significant revisions and you are basing your optimism on announcement that does not even provide us with the total number and where did the increase came from - which is strange to say the least.
My reasoning - OECD stocks are falling - this is the only firm and verifiable trend I have observed in recent months, October included. Since OECD demand has not unexpectedly jumped (the prices were record high after all!) where have all those extra barrels gone? Something is fishy in here.
Some one is full of it! If Kebab's #'s are correct for OPEC Nov production, it was up 350,000. So who produced the other 1.05 million. Not the North Sea, Not Mexico, Not US, Not Chavez. So who? The IEA hasn't even corrected Oct #'s yet. I believe RR posted his latest blog 2 days too early. As someone said it will an interesting week ahead.
I confess--I have been hoarding in anticipation of higher prices. I put the oil in a bunch of old single hull tankers and park it just outside the 12 mile limit. Once you offer $200 per barrel, it will be found. I am a greedy oil company. After Windfall profits taxes are imposed, neither I nor my oil will be found. Sincerely, Lou Raymond
But again, demand is 'supposedly' 88 million bpd, while supply is 'supposedly' 85 million bpd. OECD stocks make up 70% of global oil stocks, and they are being drawn down at around 1.5 million bpd. So when you add in the increase of 1.4 million bpd from October, and see that stocks are dropping around 1.5 million bpd in the OECD, things seem to add up. Of course, fiddling with one number must mean we are fiddling with another, so either demand is around 86.5 million bpd, or production is around 86.5 million bpd.
Q4 demand was forecast to come in at 87.64Mb/d last month. The estimate has gone down by 0.5Mb/d, and so should be around 87.14Mb/d for Q4. That doesn't say what it is for October, of course, but 87 is probably a better estimate than 88.
When compared to the calculated production rate of 86.5Mb/d, that suggests the drawdown in stocks should be 15-20Mb, or 10-15Mb less than what we see. It's worth noting, though, that China has been filling its strategic petroleum reserve all year, so it's entirely possible that some of the "extra" barrels would have gone there.
Wrong! We may or may not have a new peak month for Global Liquids Production. But Oil peaked in May of 2005 at 74,298,000 barrels per day. October 2007 oil production will come nowhere close to that figure.
However twenty years from now, no one will ask what month we peaked. They will ask what year we peaked. That peak year will be 2005. If they say "but what if you throw in natural gas liquids, ethanol, biodiesel and refinery process gain"? Then that year will probably be 2006. But it sure as hell will not be 2007.
Ron Patterson
If production really is up 1.4 million bpd, then C+C will most likely have eclipsed the previous high as well. Unless you actually believe that Ethanol production increased by 1.5 million bpd in the US, seeing how no new LNG plants came online in October.
Lets not be silly, shall we?
And what about Mr. Deffeyes. Hes been lauded around here for his 'timing' in correctly predicting the peak. He even goes so far as to say hell 'take it' for being off about 5 months. But when the peak is eclipsed 2 years later, suddenly it doesn't matter right? Oh what a twisted line of thought you have :P
Well no, August 2007 production was 1,786,000 below May of 2005. I will wager October production does not come within half a million barrels of the May 2005 high.
Ron Patterson
The Skeptics Guide to the Universe Presents our Top 20 Logical Fallacies
http://www.theskepticsguide.org/logicalfallacies.asp
You'll have to explain what you intended that to apply to, as PartyGuy did not appear to be committing that fallacy. If a month in Q4 does indeed become the new record for oil production, then Deffeyes will not have been the victim of Moving Goalposts; he'll simply have been wrong.
But Oil peaked in May of 2005 at 74,298,000 barrels per day. October 2007 oil production will come nowhere close to that figure.
Actually, it will be. Very close. The last numbers available from the EIA say C+C in August was 72,512. The EIA doesn't have any later numbers than that, but the IEA said that supply increased by 415,000 bpd in September, and now 1.4 million bpd in October. If those numbers are in the ballpark of what the EIA eventually reports, you will see C+C right at that record mark. And then there are indications that production is up somewhat in November, and then when the UAE field comes back up, will probably be sharply up in December. So I think the May 2005 record will likely soon fall.
I don't think so Robert, I can see no indications that production is up in November. Not just because of the UAE but also storms in the North Sea and floods in Mexico.
But so far the average for 2005, C+C is 73,807,000 barrels per day. It is a lead pipe cinch that that will not be surpassed in 2007 as the average for the first eight months is 704,000 barrels per day below that figure. But I will bet you $100 that the average for 2008 does not surpass the average for 2005. I am talking about crude oil of course and not crude oil plus bottled gas and ethanol.
One more point. No one got excited when C+C production dropped three quarters of a million barrels per day in August, and All Liquids dropped almost a million. But October production of liquids jumps, according to early reports from the IEA, and suddenly everyone thinks this is the beginning of a new era in world oil production. Well, I just flat don't believe it and I think the next few months will prove me right.
Ron Patterson
I can see no indications that production is up in November.
Didn't Oil Movements, which people seem to put a lot of stock in around here, say that shipments were up modestly from October? 50,000 bpd or so? However, you may be right about November being off a bit as a whole, because of the North Sea and Mexico. But I think December is going to be well up there, and probably break the previous record.
But I will bet you $100 that the average for 2008 does not surpass the average for 2005.
Ron, while I firmly believe you are wrong about that, no bets for me in 2008. When I go to bed thinking about oil prices, dream about oil prices, check on oil prices during the night, and wake up thinking about oil prices, it isn't healthy.
suddenly everyone thinks this is the beginning of a new era in world oil production.
Who thinks this? I don't. I merely think that we haven't yet peaked, but we are within spitting distance. My argument is: Despite the fact that we haven't peaked, with the supply demand imbalance, for all practical purposes we have. We need to start planning for a very difficult period ahead.
Further emphasizing the rise in Global Oil Production, and the fall in global demand due to high prices is this article:
http://news.yahoo.com/s/ap/20071113/ap_on_bi_ge/oil_prices;_ylt=AlG_29qd...
Note the continuing decrease in future oil demand growth. Perhaps we will never 'demand' 116 million bpd in 2030 after all...
And another source states that oil increased by 1.4 million bpd in October, with OPEC alone increasing production by 410,000 bpd in October, while China, Russia and Azerbaijan all increased production. Interesting times we now live in, eh?
Robert, I appreciate and respect your position. However I think you are wrong, but Leanan is correct when she has said, several times, it simply doesn't matter.
My posetion has been, and you can check the archives, that we are at peak right now. That is, we are on the peak plateau right now and it simply does not matter what month was the peak.
I don't believe anyone follows the production of each and every nation as I do. I see several nations in decline and a few nations still increasing production. Russia is on her peak plateau and so is China. These are two really biggies. Angola and Azerbaijan are still increasing production by leaps and bounds. Kazakhstan will surge in production beginning in late 2010, just before Angola peaks. Brazil will put on a lot of new production in about two or three years. Canada will gradually increase production but not enough to amount to very much.
That's it!
Declining nations will continue to decline at in excess of 5% per year. Increasing nations will increase but not nearly as much as declining nations decline.
We are at Peak Oil today monthly fluctations in production notwithstanding!
Average C+C production in 2005 will be the peak regardless of what month surpasses production of what month.
Ron Patterson
Leanan is correct when she has said, several times, it simply doesn't matter.
The economic effects of the rising cost and the human VS human reaction to the perception of an every tightning supply strike me as why the 'peak date doesn't matter'.
As the supply is not keeping up with demand - the economic effects of relying on a cheap energy source will continue to happen.
I agree with you and Leanan...hitting the Peak Oil date exactly is not really important. What I think is important is the date of "Peak Oil Awareness". I think 2007 is a notable year in that regard. I have seen more and more MSMs picking it up and reporting it better than in previous years. I have also seen much on the topics of how to survive or plan for a world with less cheap oil around. Changes in dogma can happen quickly or slowly. I think Stuart's slow squeeze is the reality of the day...and with that comes slow changes in behavior, but I think we are seeing some.
People realize expensive gasoline is not going away. They will have to deal with it. On any given week, they can see gasoline prices spike up $0.30 or more. It may come back down temporarily, but overall it keeps going up.
The finish line keeps being retroactively pushed into the future. Revisions of history like this is what makes people lose credibility.
I think the "slow squeeze" may be a lot slower than many of us ever imagined.
There have been gasoline and diesel shortages in the midwest for half a year. Now it's fall, farmers have been desperately seeking diesel for the harvest, and they're rationing heating oil (because there's not enough diesel to deliver it).
But it doesn't make the news, except locally. There's no real urgency to fix the problem.
The price signal isn't enough. Actual shortages aren't enough. What is it going to take?
Maybe shortages that affect New York and LA. But at this point, I wouldn't bet on it.
Re: slow squeeze
I know you've posted a number of articles on this, and they generally don't get commented on. Do you have a folder of grouped articles, such as reports of shortages in midwest that you note here?
I don't, but over at PeakOil.com, there are a bunch of stickied topics in the Current Energy News forum. They are repositories for news stories on certain production and supply problems. Refinery and pipeline problems, Global fuel shortage reports, European fuel shortage reports, etc. Articles about the midwest problems are in the North American Fuel Shortage Reports thread.
Ruthven, Iowa received 87 octane on Monday but their diesel pump remains dry. My local station got replenished on Monday as well.
I'll clarify for those in urban areas: this pump being empty does not mean that crops are going unharvested. Farmers keep diesel in drums of up to several hundred gallons mounted on a stand tall enough to allow gravity feed to the biggest farm implements. These storage tanks are filled by the "bulk truck" from the cooperative. It is very common to find a smaller drum of perhaps a hundred gallons mounted beneath the diesel drum which holds gasoline for cars, pickups, lawn mowers, and so forth. The pump in the picture is for diesel pickups and sometimes the saddle tank with a pump they carry for filling equipment in the field.
The stations having problems at the moment are the independents. The loss of such a gas station in a town of less than a thousand is a serious blow. Ours houses the only video rental source in town, the only groceries available after 5:00 PM, and the ATM for the local bank. The Ruthven station is a twin to ours in terms of multiple uses for the community.
I will report a sort of bright spot, however. Today I shipped an item I sold on Ebay and in conversation with the person behind the counter the subject of gas prices came up.
It seems there is some sort of natural gas work being done in the region, which I would guess to be pipeline infrastructure upgrading, and this woman had been talking to one of the people doing the work. She'd got the idea that gas was going to go clear up to $3.39 a gallon(!) and maybe never go back down.
I filled her in a little bit on what I know based on my readings here and the fear was obvious - she is seeing the changes in fuel surcharges from carriers and an overall decrease in shipping. She was a bit older than me and when I said "another Great Depression" she got quite interested in making sure my stuff was packed and ready to go before the driver arrived. Her parents lived it and she internalized that one right away.
Again, depends on who you ask.
The IEA gives Russia a Sept06 to Sept07 growth of 3.5%, with as-yet-unknown further increases in October. The last 6 months alone have seen a 2.4% growth rate, which is anything but a plateau.
According to both the IEA and the EIA, China's oil production has increased in each of the last 5 years, by an average rate of 2.4% per year, with increases of 3.3% and 2.0% in the last two years. Again, that is anything but a plateau.
In excess of 5%? Let's check that figure with the EIA's data, using average decline rates over the last 5 years:
- USA? 1.3%
- Argentina? 1.7%
- Columbia? 3.1%
- Venezuela? 3.4%
- Norway? 4.0%
- UK? 8.8%
- Congo? 1.5%
- Egypt? 2.3%
- Gabon? 2.6%
- Australia? 6.4%
- Indonesia? 5.1%
And that's it for countries with a 5-year declining trend and nontrivial oil production. Of 11 countries, only 3 have decline rates in excess of 5%, and the weighted average is a 3.07% decline rate.
So it's misleading at best to suggest that declining nations are doing so at rates in excess of 5%, and the evidence does not support a claim that they will suddenly start doing so.
The evidence suggests that you're right, and that the EIA and especially the IEA indeed follow the production of some major nations in a rather different manner than you do.
Pitt, when I post something about production data, you can take it to the bank. Below are the gainers and losers over the last 12 months, from August 2006 to August 2007. The formatting will look like crap because I copied and pasted it directly from an Excel Spreadsheet.
But just look at the last three lines, Gainers and Losers. The losers are down, on average, 5.8% over the last 12 months. If you average it from May 2005, you get very close to the same results. The losers are down over 5% on average, when the precentage drop is annualized.
And that is taking the sum of all data, not just averaging each country where the very small producers would have a much larger effect.
.........August 1 Yr Ago..Last..Change % Chg.
Angola........ 1,460 1,730 270 18.49%
Azerbaian...... 710 882 172 24.23%
Canada......... 2,543 2,709 166 6.53%
Sudan......... 380 486 106 27.89%
China...........3,670 3,746 76 2.07%
Other.. ........2,662 2,726 64 2.40%
Russia......... 9,330 9,390 60 0.64%
Brazil......... 1,703 1,758 55 3.23%
Egypt.......... 630 679 49 7.78%
India.......... 650 693 43 6.62%
Eq Guinea...... 365 406 41 11.23%
UK...... 1,202 1,228 26 2.16%
Algeria ........1,805 1,824 19 1.05%
Gabon........ 237 245 8 3.38%
Kazakhstan.... 1,327 1,327 0.00%
Libya......... 1,700 1,700 0.00%
Syria.......... 400 397 -3 -0.75%
Colombia....... 534 527 -7 -1.31%
Malaysia....... 599 587 -12 -2.00%
Argentina...... 700 684 -16 -2.29%
Yemen.......... 370 351 -19 -5.14%
Qatar.......... 885 865 -20 -2.26%
Denmark ........348 323 -25 -7.18%
Oman........... 727 702 -25 -3.44%
Australia...... 470 443 -27 -5.74%
Ecuador ........544 509 -35 -6.43%
Vietnam ........342 304 -38 -11.11%
UAE..... 2,702 2,659 -43 -1.59%
Venezuela...... 2,490 2,444 -46 -1.85%
Kuwait ........2,550 2,500 -50 -1.96%
Nigeria ........2,430 2,380 -50 -2.06%
Indonesia...... 1,015 952 -63 -6.21%
Iran........... 4,035 3,900 -135 -3.35%
USA............ 5,155 4,976 -179 -3.47%
Norway..........2,430 2,135 -295 -12.14%
Iraq.......... 2,230 1,903 -327 -14.66%
Mexico ........3,252 2,843 -409 -12.58%
Saudi.......... 9,300 8,600 -700 -7.53%
All............ 73,882 72,513 -1,369 -1.85%
Lousers ........43,508 40,984 -2,524 -5.80%
Gainers........ 27,347 28,502 1,155 4.22%
Ron Patterson
You might want to start explaining your claims about Russia and China, then - those were just plain wrong.
And you'll excuse me if I'm not impressed by a list that consists of (a) highly volatile month-to-month rates of change, that (b) don't agree with other sources, and (c) have been superceded by newer data anyway.
IEA's data for September production shows a 7% year-on-year increase for Iraq, for example, and a 1.5% increase for the USA. Even the declines are lower - 4.6% for Indonesia, 3.3% for Mexico, and 6% for Saudi Arabia, which we've already been told doesn't represent "true" decline due to its production increases over October.
It's folly to try basing conclusions on a list calculated like that one - the month-vs-month rates of change are far too volatile to get any kind of sensible trend information and also fails to take into account OPEC's behaviour, which is exactly why I used (a) an average, of (b) annual data, for (c) countries with a clear declining trend.
As it is, you're trying to find patterns in noise. It's not very convincing.
Remarkable that Russia's own figures show a growth of just 1.5% from September 2007 to September 2006.
Are you a fool or a liar?
1.5% growth is still growth. Not a Plateau.
And that's all that matters.
Components of "all liquids" compete directly with conventional oil - in, for example, industrial feedstock markets - so very few people care whether some arbitrary subset of "available liquid fuel" is down. Might as well just say that "onshore conventional" peaked ages ago and make a fuss about that.
You're saying that with more certainty than the data allows.
According to the IEA - and adding 1.4mb/d to their Sept total of 85.09 for Oct - production over the first 10 months of 2007 has been higher than the 2006 average (by 38kb/d), and production of 85.21mb/d in Nov and Dec would see 2007 total production be more than 2006 production. If Oct production was indeed 86.5mb/d as their report seems to indicate, 2007 is more likely than not to exceed 2006.
By the EIA numbers, those first 10 months (adding .415 to Aug for Sept and then 1.4 to Sept for Oct) are below the 2006 average (by 127kb/d), but exceeding 2006's production would require only 85.23mb/d in Nov and Dec, both of which are 0.5mb below the calculated rate for Oct.
So I'm not sure there's quite as strong a case for 2007 production coming below 2006's as you suggest.
It certainly makes a difference as far as price goes and show me someone who doesn't care if he pays $150/gal for gasoline or $3.50/gal.
Evidence?
This has been covered before, and non-oil liquids are just as important now as they were then. The largest component - NGLs - competes directly with crude oil in a variety of markets, including gasoline blending components ("natural gasoline") and ethylene feedstocks (e.g., plastics).
So there's evidence that non-oil liquids can directly substitute for oil in many of its uses. Where is your evidence that it makes a difference?
You are saying I need evidence that offshore and deepwater oil production is more expensive than onshore conventional????
Well, I don't have any ready evidence that the sky is blue either.
No, I'm saying you need evidence that a rising fraction of non-crude liquids in the "oil supply" total means higher prices.
If all you're saying is that some production methods cost more than conventional onshore production, that's true - oil sands are an obvious example. But since conventional onshore peaked years or even decades ago, I don't see how that's relevant to today.
2/3 of oil production is used for transport. That is why we don't see lower natural gas prices much influencing the price of oil.
The two are separate markets.
Plus, the non-oil portion of "all liquids" has a lower energy density than oil.
If Pitt's argument were true, oil prices couldn't be close to $100 right now.
Not that I'm a party pooper, but that figure is not "oil" production. It is total liquid fuel production, which icludes ethanol, natural gas liquids, and tar sands (if I recall correctly). Even if the updated figures are correct, that doesn't automatically mean oil production has exceeded it peak of 74.3 mbd in May of 2005.
The July 2006 peak in the IEA Monthly Oil Market report was a single month one-off event, being around 1 mb/d higher than the other months before and after:
May 2006 84.79 mb/d
June 2006 84.98 mb/d
July 2006 86.13 mb/d
August 2006 85.52 mb/d
September 2006 85.14 mb/d
Those are products, not oil.
Think about it for a moment - those two amount to 186,950 tons of oil per day, which - at 7.3 barrels per ton - is 1.36Mb/d, or less than 14% of Russia's total oil production.
The part of the article you snipped out - "Russian gas-oil and fuel-oil exports fell in October" - should have made this clear to you.
By the way, your link's html is broken: link