I think this month, with a fall in production in May, the data raise the question more urgently. With the sharp drop in prices also (see graph below), I think there has to be a question whether the sovereign debt crisis is starting to weigh on the global economy and lower global oil consumption and production. The IEA suggest an alternative explanation:
Total oil supply fell by an estimated 575 kb/d to 86.3 mb/d in May, with lower non-OPEC output due to seasonal maintenance.Maybe so. It will be very interesting to follow the June data.
It looks like you are tracking total liquids and comparing that to WTI Crude prices. Given the variety of costs and EROEI for the liquids, it might be better to compare crude with crude or at least mention the discrepancy in the data.
ReplyDeleteI do appreciate your blog. One of the things holding me back on having my own blog is how nitpicking I am on my own stuff, which makes me too slow a writer. Better to go with what you have got than not to put anything out at all.
Your second chart seems to show a clear knee in late 2004.
ReplyDeleteSomething happened in 2004 that changed trend growth from eight-thirds of a million barrels per day per year, to about two-fifths. What was that?
I doubt it was Greece beating Portugal 1-0 in the European Cup, or the death of ex-president Reagan. It could have been the series of hurricanes that swept through the Gulf, though. That might have changed investment strategies. In which case, the BP debacle will only reinforce the change, and delay any reversion to the first trend.
How are things going in Iraq?
Greg:
ReplyDeleteI guess you missed out on the last five years of peak oil debate :-) Not quite sure where to start to catch you up. You might try searching for "Saudi Arabia" on The Oil Drum with a particular focus on the 2006/2007 timeframe, and on pieces by Euan Mearns, myself, and Joules Burn.
A little more constructively: essentially, the rise in production through 2004 primarily came from increases in Saudi and Russian production. Those two countries largely levelled out in the 2005-2008 timeframe. There was (and probably still is) a great deal of debate and disagreement on why this is so, and what it meant for the future of oil production, but at any rate, that was the proximate cause of the bumpy plateau in global oil production from 2005 on.
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