Monday, April 15, 2013
Time for the monthly update on global oil supply in which I summarize the numbers for global oil production from the various oil agencies into a small set of convenient charts. This is for the benefit of those of us who like to do micro-tracking of peak-oil related issues. This month, I have made one charting innovation. The above graph shows global oil production since 2002 to give the full period of the "bumpy plateau" that started about the beginning of 2005. I have now added to this a green line (C&C (EIA)), which shows just the "Crude & Condensate" numbers from the EIA. This eliminates biofuels, natural gas liquids, and refinery gains from the picture, and is a more purist definition of oil. Which is better to consider is a matter of debate, but now we don't have to choose - we can see both at a glance.
The big picture is that the bumpy plateau slopes upward in both sets of data (ie anyone claiming peak monthly oil production was in 2005 or 2008 is not paying attention to the data). However, the "all liquids" line slopes up more than "C&C", because the natural gas liquids and biofuels have grown quite a bit.
This next graph shows the all-liquids data since just before the great recession, to give a tighter context for looking at the most recent months:
The micro-trend since the beginning of 2012 has been for oil supply to be pretty much flat, and this continued in March (the newest data point released in the last few days). Next we can look at the price context:
This chart also allows better distinguishing between the different agencies (giving some idea of the uncertainty in global oil supply). Brent oil prices have been in the $100-$120 range since the Arab Spring, but have been dropping slightly on average. Given Saudi Arabia's recent production cuts, I would be surprised to see oil prices drop below $100 for any length of time.
Finally, we can look at price and production plotted against each other:
This shows how the pre-2005 world has gone (seemingly forever), in which oil prices were low and production could increase significantly without much price change. Essentially, oil was a "buyer's market" back then, and since 2005 it's been a "seller's market". In the short term (within each oval), small changes in production are associated with huge price changes - demand for oil is very inelastic. However, supply has been slowly increasing over time (the ovals move up the chart with time).