Tuesday, March 15, 2011
The IEA Oil Market Report came out today, and confirmed what OPEC said on Friday: global liquid fuel production reached a new high in February, notwithstanding the turmoil in the Middle East. The graph above shows the three main public sources of "all liquids" fuel production, along with the spot prices on the right hand axis (though be aware that this is WTI spot prices, which have been anomalous lately).
Just focussing on the last few years, the picture looks like this, showing the way in which current production has now comfortably surpassed the previous peak in 2008.
It's worth noting that "all liquids", which is the best documented global oil production series, includes minority components like biofuels, syncrude from tar-sands, and natural gas liquids (with molecular weights all the way down to propane). More conservative definitions of oil like crude-plus-condensate (C&C) have not yet passed the 2008 peak (but the data are several months behind the all liquids data, and I think it's likely the C&C signal will also reach new highs once the data is available).
Here is the price/production plot I usually put up each month:
This shows the regime change from the pre-2004 era to the post 2005 era when oil supply has become much less elastic as the world has had very little spare capacity. (Note that the recent months would look less outside the 2005-2008 envelope if it wasn't for the aforementioned WTI-Brent anomaly).