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From my oil trader friend:
I posted a note previously about the "Two Year Rule," i.e., the Lower 48 decline was quite low for the first two years, primarily because of the final Texas peak. Texas itself showed a similar pattern. If we round off to the nearest 0.1 mbpd, Texas peaked at 3.5 mbpd, followed by two years at 3.4 mbpd, versus a long term decline of about -4%/year.
In any case, 2008 could be to the world, and to world net oil exports, as 1973 was to the Lower 48 and as 1975 was to Texas, i.e., the onset of the sharper decline period.
Rembrandt showed the start of a renewed downward slope in total net oil exports. With the recent news from Russia, Mexico, etc., it's plausible that the net export decline is continuing, and our model and recent case histories show that the net export decline rate should accelerate with time.
Russian production is down. OPEC shipments are down. But the only reason oil prices are going up is speculation. Yeah, right.
And the drop in the dollar. And because we are not drilling everywhere, and because the Petrosarus' are not doing their jobs.
2 arguments against the speculation position I heard on CNBC: the fact that trading volume is high and the fact that we're in a contango situation.
Can anyone please explain how high trading volume and contango both undermine the speculation argument?
WT,
I found one of the articles and something else too about increasing OPEC production but together it is interesting enough.
http://www.guardian.co.uk/business/feedarticle/7530772
http://www.bloomberg.com/apps/news?pid=20601072&sid=a8Ly_081LZpQ&refer=e...
That makes 1.24 million less barrels exported in April over March. It seems that they pumped in 4 weeks of April 31.7 million and exported 23.786 million barrels so they used themselves 7.914 million barrels. In May they will have pumped probably 700,000 barrels more but exports not mentioned for May in first article.
April opec
Production 31.7
Export 23.786
Internal use 7.914
May opec
Production 32.4
Export ???
Internal use ???
So what do other countries get from these 700,000 barrels? Why were exports so down in April? Will they keep the 700,000 barrels for themselves? It seems a bit of a yoyo in production. Priduction up and down but nobody really tracks the long term over last year or the import/export side consistently in the press. This is like reading house prices up 5% this month over last month but down 30% yoy but the press doesn't mention it.
Saudi Arabia's total liquids production in 2005 was 11.1 mbpd (EIA). I estimate that if we they wanted--and more importantly, were able--in 2008 to match their 2005 net export level, they would have to produce an average of about 11.7 mbpd in 2008.
Or, you can put it this way. If they maintained about 11 mbpd forever, with no decline, and if they maintained their 2006 rate of increase in consumption, they would cease exporting oil around 2036.
Because of a rapid increase in consumption, the US hit zero net oil exports more than 20 years before our production peaked.
the US hit zero net oil exports more than 20 years before our production peaked
See Interstate Highways, the creation of modern Suburbia, the universal destruction of our downtowns and inner cities, etc.
Best Hopes for A Reversal,
Alan
By the way, while russian output felt 0.7 percent, the inner consumption grew 5.7 per sent, following strong economy growth and car''s increase. It means that export felt at least 6.4 persent.
No it doesn't.
The 0.7% is a percent of a different quantity than the 5.7%.
You can't just add 'em up.
If we say the US imports 13 million barrels/day at $130/barrel then there is roughly $1.7 billion leaving the country every day or 12 billion/week going to the oil exporters from the US alone or maybe twice that worldwide. It seems clear they do not want to recycle all this into bonds and looking at the huge amounts of building works going on in the ME energy use there will only continue to increase so reducing exports so increasing prices...
Mexico Pemex Jan-Apr Crude Output 2.88M B/D, Down 9% On Year (probably paywalled)
April Pemex production release is here (PDF)
Mexico production and export numbers.
C+C production down 80,000 barrels per day, March to April.
All Liquids down 78,000 barrels per day, March to April.
Exports down 189,000 barrels per day, March to April.
Exports down 240,000 barrels per day, April 2007 verses April 2008.
Ron Patterson
More from Dow Jones Newswires (may be paywalled)
Analysis of Mexico's Battle Over Oil
Mexico's Joe Sixpacks and their wives are preparing to fight to retain their resources from looting by neoliberal interests led by the US Empire.
Even if there isn't a neocon conspiracy against Mexico and its oil, the people of Mexico should act as though there is one based on their past history with the US and the current disaster perpetrated by the US on Iraq. The burden of proof is on us to show that we have something to offer most Mexicans besides sweatshops.
Yet nowhere in any major American media is there any discussion of the idea that the United States must justify its demands to the rest of the world based on rational self-interest. There are occasional reports of the negative effects of the World Bank/IMF cabal on various countries (the list is endless), and less often reports on the negative effects of NAFTA on Mexico. What we are not allowed to do is put these stories together the way that people overseas increasingly do:
What's good for America is bad for everyone else.
What's good for everyone else is bad for America.
These ideas are so alien to our eyes that we make no demand to our leaders that they articulate an alternative. Even the most liberal Presidential candidate who is electable must phrase the problem in terms of misunderstanding on the part of the foreigners.
The most absurd and dangerous form this has taken is when democratic governments like Turkey have given into the popular will and refused to aid the US invasion of Iraq, while other democratic governments like Denmark defied the popular will by joining Bush's crusade. Bush's propaganda ministry (state & corporate wings) invariably talked of the defiant actions as coming from the "government", while the compliant actions were by the "nation" or "people". In other words, only evil big government says no to America. The people everywhere are always on our side, only muzzled by socialist tyranny. We've been living under this formula for generations, and we've used it to ruin Vietnam and Iraq to the tune of millions dead.
So now if Mexicans line up against US oil companies, will we pretend again that the majority are just brainless (and thus cartoon-killable) clones of renascent Communism, and the corrupt business minority are somehow "the people of Mexico"? Because we are known to go war to save the people from Communism.
Even if there isn't a neocon conspiracy against Mexico and its oil, the people of Mexico should act as though there is one based on their past history with the US and the current disaster perpetrated by the US on Iraq.
If the 'mexicans suk - stop 'em from coming in' crowd is right, there is evidence that citizens are being told exactly that by some elements.
To the article on Pemex should be added the discussion of Bush's plans for Iraq's oil as shown by Schwartz, which displays a continuum in the Empire's overall strategy.
What an incredibly biased article by the author Laura Carlsen. As far as PO though, she doesn't seem to appreciate the need to lessen the slope on the downside of oil production.
Like the ELM, the UK and Indonesia, Mexico was consuming about half of their production at peak, so they are in the "red zone," unlikely to be a net exporter beyond 2014, and their year over year change in net oil exports should look something like the ELM, UK and Indonesia net export year over year changes:
As I have noted on the other threads, it appears that all three of our closest sources of exported oil--Canada (slight decline), Venezuela and Mexico--showed net export declines in 2007.
Hey WT, oil is fungible, right? Proximity doesn't matter, right? I am joking of course. I do not see oil as fungible, especially when national protection of natural resources kicks into high gear in the not too distant future.
Once the sides are drawn up over the last of the Petro Battles, proximity to the resource will be key to survival.
Exactly. That's why I moved to Calgary.
Actually, lack of proximity to the resource is key to survival when it comes to a shootout at the Last Gas Pump. I certainly would prefer to be somewhere else, living a low profile life without much need for the resource in question, when they start applying violence to the problem of who gets the last drop.
Good point--real damn difficult to determine that geo-located 'sweetspot' where you can still get access to vital resources by foot, riding animal, or bicycle, but still far enough away where you hope your Eco-Tech Bunkers isn't decimated.
*clap* *clap*
Add to that the ability to 'reach out' and 'touch someone' from a long way away via deer hunting rifles/.50 cal FMJ - kinda hard for the isolated to make it if things get shooting bad.
Hi early,
I agree, probly best to "make other arangements" as JHK says. Get used to doing without ff, or very little. New ways of living are on the horizon, hell, they're just around the corner. Got to get it out of our brains, this "life via oil". It's over. That doesn't mean life is over, just our modus operendi. Good call.
Jeff
Yes, don't wait until you absolutely HAVE to do without to start doing without. Get ahead of the curve and start learning how to do without now, so you have time to practice and make non-fatal, correctable mistakes.
When I said "proximity to the resource will be key to survival" I was referring to a particular country not an individual.
And the actual numbers for Cantarell in April are here:
http://www.bloomberg.com/apps/news?pid=20601086&sid=auA2G9v81BqM&refer=n...
Last month was 1.17 million, so this is the first month where it is below half the peak production rate. And it looks like it won't be long at all before the world loses one of its 1mbpd fields.