Thursday, February 10, 2011
Both OPEC and the IEA put out their latest estimates of global liquid fuel production today. The numbers are up again, and have now incontrovertibly passed the previous highs of July 2008:
This is particularly so when one considers that July 2008 was essentially a one month spike to that level - and we have now had three months above that level. Clearly, the slowdown in the global economy in mid 2010 is over, and we are now recovering growth in economic activity again. Oil usage is following suit.
Putting this in context - here's the data from 2002 on. This shows the recovery after the 2001 tech-crash recession, the onset of the "bumpy plateau" in 2005, and the "bumps" up in 2008 and again now.
It's interesting to note that the rate of increase since the depths of the slowdown in 2009 is almost as great as the rate of increase prior to 2005:
(These lines are hand fits). Between 2002 and the start of 2005, the rate of increase was about 3mbd/yr. Over the last two years or so, it has been about 2.25mbd/year. I suspect that we are going to find that even that rate of increase cannot be sustained too much longer without prices going higher.
At the moment though, it still looks like the current production levels are being achieved at significantly lower prices than during the 2005-2008 oil shock:
Obviously, the length of time that production can continue to increase at something similar to present prices is intimately tied to the questions of OPEC, and particularly Saudi, spare capacity that we discussed yesterday.