In the last two weeks alone, three of the world top oil exporters have warned that their oil production will decline faster than expected in the next one to three years:
August 19th: Russia warns (World 2nd largest exporter - EIA 2007)
Russia's oil production will decline year-on-year in the next two years, as the current oil fields will dry out and opportunities at the new fields will be limited, the country's Finance Ministry said Thursday, as it cut the country's oil and gas production outlook for 2009, 2010 and 2011.
In its projection of the budgetary policy for the period between 2010 and 2012 the ministry said it expects oil production to decline 0.6% to 485 million metric tons (3.638 billion barrels) in 2010 from 2009, and drop a further 0.4% to 483 million tons in 2011. The ministry expects 2009 production to be at 488 million tons, which is at par with the 2008 level. The forecast decline, while consistent with many independent outlooks, is a sharp change from the ministry's previous estimate, which saw a steady rise in production in all three years.
August 29th: Mexico warns (World 13th largest exporter - EIA 2007)
Mexican authorities said they expect average daily crude output to fall in 2010 to 2.5 million barrels per day, which would represent a four percent drop compared with the first half of this year and a decline of 14 percent since 2008.
Both officials said the decline was due primarily to the steady depletion of the offshore Cantarell field, once Mexico's largest.
'We're seeing a significant decrease in ... Cantarell, and so for the coming year we're estimating that we're not going to be able to recover the levels of production we previously had,' Kessel said.
September 1st: Norway warns (World 4th largest exporter - EIA 2007)
A Norwegian Petroleum Directorate report said Tuesday that oil production is expected to average 1.91 million barrels per day this year, and dwindle to 1.62 million barrels per day in 2013, a 10 percent larger decline than projected last year.
Production was about 2.2 million barrels per day at the end of 2008, after falling from a peak average of 3.1 million barrels per day in 2000.
What is of interest is that all those warnings are being issued by governmental entities, which usually tend to lean on the optimistic side.
Meanwhile oil demand in the developing world continues to grow at a brisk pace underpinned by strong economic growth and strong car sales especially in China and India, where implied oil demand in July grew by 3.5% and 3.6% year over year respectively.
It does seems that as the world economy rebounds, the forces of declining supply and growing demand will continue to exert upward pressure on oil prices.
Disclosure: The author is long oil stocks, specifically China North East Petroleum (NYSE:NEP).