Oil Production on the Rise

Oil production rose briskly from 2002 through 2004, before appearing to hit a peak in 2005. That peak fueled more discussion of peak oil theory. However, rising prices have induced additional supply:

Since last August, however, production has been on the increase again. (I consider the last observation, April, to be month-to-month noise in the data.)

Why have prices been rising so rapidly with rising production? Got to be demand growing even faster. That demand is likely to cool, though, due to slower U.S. economic growth and higher fuel prices in China. (Their prices are controlled by the government, which recently hiked them.)

Comments

[oil baron:]

Bill, you better recheck your world oil production chart....Looks like you're off by about 10 mmbopd.

2008 Jul 22 09:01 AM

[Gigem77:]

He is using oil only. The 85 to 87 mmbpd that is oft quoted includes natgas liquids and some other odds and ends. More importantly, the fundamental premise is wrong. Production is not rising world wide. Also, increasing internal consumption by OPEC and Russia is decreasing the amount of oil available for export.

2008 Jul 22 09:55 AM

[john s. gordon:]

question - if there are 271 billion bbls in the bakken and only 36 billion bbls in AK north slope, why are we messing around with ANWR & the outer continental shelf? somebody pls notify dick cheney.
> jack

2008 Jul 22 03:44 PM

[oil baron:]

If someone posts a graph stating it is world oil produciton they should understand that the universal method of posting an oil production chart includes ng liquids and that is why this graph is misleading. There should have been a note attached to clarify.

The Bakken shale my have 271 billion barrels of oil in place but less than 10% is recoverable by current technology

2008 Jul 22 04:43 PM

[Iconoclast421:]

Bakken oil is low volume high cost, ie low density... meaning they need to spend amounts like 4 million dollars setting up wells that only produce around $10 million in oil. There is profit to be had, but it's not much. For a $4 million dollar well, them greedy bastages will want $50-$100 million in oil. Some bakken plays will pay off though, I'm not trying to say there won't be lots of production from there. But it will be a couple hundred thousand barrels a day, not the million+ a day that can come from ANWR.

As gigem77 said, that chart is for crude oil. And crude oil is definately the chart you want to look at, since the other 13 mbpd of liquids is ambiguous because we dont know how much oil, coal, gas, farm acreage, water, Potash, etc was used to generate those liquids.

Actually we dont even know how much crude oil and gas and coal is used to produce our 74 mbpd of crude, but it is so relatively close to zero that it doesnt matter as much. The number is much higher for total liquids.

2008 Jul 22 04:51 PM