Thursday, August 11, 2011
Global liquid fuel supply increased again in July according to both OPEC (secondary sources) and the IEA. See the graph above for the history since the beginning of 2008. We are still not quite back to the level of January, immediately before the Libyan crisis. In my view, this constriction in energy supply was an important factor in the slowdown in the global economy in the first half of 2008, along with the uptick in inflation. The uptick in production in the last couple of months, and the fall in prices, will ease that strain (though it's not the only important factor of course).
Here is the longer history from 2002 with monthly WTI spot price on the right hand scale:
And here's the price-vs-production chart: