Global production of crude oil turned away from its year long recovery of 2009, and lurched downward again this Spring. Fresh data through June, just updated from the EIA on Friday, shows that Non-OPEC is leading the downturn coming off the Winter highs. After recovering to a 2010 high of 42.435 mbpd (million barrels a day) in March, Non-OPEC oil production has fallen in April, May and now June to 41.970 mbpd. The declines have also come via downward revisions, as even higher totals in the first half of 2010 have now been taken away. The data update () is fresh as of yesterday from EIA Washington, and is current through June 2010:
It’s important to remind that Non-OPEC supplies the world with 57% of its oil. And, while 75.00 dollar oil was certainly a high enough price to bring on the new, marginal barrel in high-cost Non-OPEC regions from 2000-2005, it’s not clear that 75.00 dollar oil is enough now to fight declines from existing fields. No doubt 75.00 dollar oil looks good in some regions. But in a world of ultra-deepwater, and unconventional oil resources, 75.00 dollar and the attendant price uncertainty may not give enough confidence to the industry to create a lot of new supply. Finally, let’s not forget that the peak year for Non-OPEC supply remains 2004, at an annual average of 42.068 mbpd. Unsurprisingly, the inability of global oil production to have bested the peak year of 2005 is being driven by its largest component: Non-OPEC supply.