Wednesday, July 13, 2011
Both the IEA and OPEC have now released figures for total liquid fuel supply in June (see above), and both show a sharp increase, mainly due to OPEC, particularly Saudi Arabia. However, levels have still not reached those prior to the loss of Libyan production in February/March (still less returned to the pre-Libya trend).
Here's the picture since 2000, also with prices on the right hand scale:
Oil prices first rose when Libya went offline, and then fell again with the resulting slowdown in the global economy.
Here is the graph of price versus production:
This month, I've added a notional orange envelope for the (smaller) oil shock we've been experiencing in late 2010-2011. The shape of this is very uncertain of course, as is the future development. If the global economy continues to recover, then I expect oil demand to butt against supply limits and prices to rise again. On the other hand, if events in Europe were to dramatically worsen and start to affect the real economy of the larger countries there, then demand, and prices, could fall further.
Still, this plot does indicate that the global oil industry is able to supply a few mb/d more at any given price point than it could in the 2005-2008 period.