I'd be very careful about using the EIA's numbers. They are still considered to be fairly optimisitc when it comes to the future. Discoveries historically do not support an ever increasing production number. We are well past the peak discoveries and it follows both logically and with proven production data that we have to move into decline unless some very large discoveries are made right now.
Until you can produce significant discoveries offsetting decline it doesnt matter what happens this year or next. We still are going to peak and move into decline. There is no one on the planet right now who can accurately predict just what that decline will be.
It does not surprise me that you dismiss Matt Simmons. Personally I do not. The facts are that there is good evidence to show Saudi production is stagnating and they are having huge difficulties growing it. I'm not saying they cant, but until I see them go to 12-13 or even 15mbpd, I'll continue thinking we got some serious problems coming.
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Re: Another Oil price Record
Re: Another Record
by AirlinePilot » Sat 12 Jan 2008, 20:40:29
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Re: Another Record
by newman1979 » Sat 12 Jan 2008, 21:56:50
"Global oil markets will likely remain tight through 2008, then ease moderately in 2009. EIA projects that world oil demand will continue to grow faster than oil supply outside of the Organization of the Petroleum Exporting Countries (OPEC) in 2008, leaving OPEC and inventories to offset the upward pressure on prices. In 2009, higher non-OPEC production and planned additions to OPEC capacity should relieve some of the tightness in the market. As a result, the level of surplus production capacity is projected to grow from its current level of under 2 million barrels per day (bbl/d) to more than 4 million bbl/d by the end of 2009. " STEO January 8 2008.
The EIA states clearly that global oil markets will likely remain tight and prices high along with $3.50 gasoline in 08. The EIA sees 2009 as a year with more oil to reduce the price pressure a little. NOC's and IOC's invest a lot of money every year to bring on new oil supplies. No doubt, at some point with high oil prices, more oil is likely to be produced, and for a short time, may even offset the depletion amounts. Time will tell how much and how high the price will be. Longer term, we will certainly be in trouble.
Looks like 2007 will be below 2006 in world crude production by at least 200,000 b/d. 2005 is, until proven different, the year crude oil peaked.
The EIA states clearly that global oil markets will likely remain tight and prices high along with $3.50 gasoline in 08. The EIA sees 2009 as a year with more oil to reduce the price pressure a little. NOC's and IOC's invest a lot of money every year to bring on new oil supplies. No doubt, at some point with high oil prices, more oil is likely to be produced, and for a short time, may even offset the depletion amounts. Time will tell how much and how high the price will be. Longer term, we will certainly be in trouble.
Looks like 2007 will be below 2006 in world crude production by at least 200,000 b/d. 2005 is, until proven different, the year crude oil peaked.
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Re: Another Record
by Twilight » Sun 13 Jan 2008, 01:04:03
$this->bbcode_second_pass_quote('Zahl', '')$this->bbcode_second_pass_quote('', 'P')laces like the North Sea and Mexico appear to be validating the export land model put forth recently and the price signals cant be ignored in light of supply.
Any particular cases won't validate the export land model as it is not supposed to be a model of particular cases. This model would gain credibility if it showed quantitatively that new net exporters like Algeria, Angola and Kazakhstan that offset 100% of the UK and Indonesia net export decline are not rising up any longer. But absolutely no quantitative argument is made that this would be the case. Instead, we have still new countries like Azerbaijan, Equatorial Guinea, Sudan and Chad that export virtually their entire output and that output is growing by the year quite rapidly.
Firstly, Export Land can be a model of particular cases, and it is. That is where it takes its name. It is a hypothetical country called Export Land. What it says about any particular country can have a great deal of significance when it comes to assessing its future prospects.
Secondly, you ask it to show something it is not supposed to show. The global Export Land picture is based on existing exporters whose characteristics are well understood. The entry of any new exporters will be included into the model as and when they arise. You can be sure it will be updated. Given the importance of the top exporters to date and their situations however, it is unlikely the appearance of a handful of new countries will change its direction. Volumes available for export will tend to decrease, not increase. The thesis is rock solid even if the model run for a particular interval shows a deviation.
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Re: Another Record
by VinceG » Tue 15 Jan 2008, 12:48:55
Citigroup Inc. delivered some of the worst quarterly results in its history Tuesday, reporting a nearly $10 billion loss that was much worse than Wall Street had
anticipated.
CNN Money
This event will probably trigger an economic recension in the US, so say goodbye to high oil prices for now
anticipated.
CNN Money
This event will probably trigger an economic recension in the US, so say goodbye to high oil prices for now
"In the U.S., fears are so exaggerated and out of control that anxiety is the number-one mental health problem in the country.", Barry Glassner
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Re: Another Record
by FreddyH » Wed 16 Jan 2008, 02:02:48
$this->bbcode_second_pass_quote('AirlinePilot', 'W')e are well past the peak discoveries and it follows both logically and with proven production data that we have to move into decline unless some very large discoveries are made right now.
Until you can produce significant discoveries offsetting decline it doesnt matter what happens this year or next. We still are going to peak and move into decline.
Until you can produce significant discoveries offsetting decline it doesnt matter what happens this year or next. We still are going to peak and move into decline.
Actually, decline is not related at all to the increase of Reserves. Production is currently only 31-Gb/yr and there's 1,400-Gb of Reserves. Decline is a function of extraction and refining capacity.
Over the last ten years, Reserves have grown at the rate of 59-Gb/yr (compared to the USGS 2000 forecast of 54-Gb annually 'til 2025). 31-Gb is lost to annual consumption. Your preoccupation with Discoveries is ill founded. Reserve Growth has been sufficient to keep the R/P ratio at 40 for over two decades.
$this->bbcode_second_pass_quote('', 'T')here is no one on the planet right now who can accurately predict just what that decline will be.
That is corrrect. But the reason is because nobody knows precisely how much new capacity is coming on stream each year. The underlying decline rate from mature fields is 3.6% or 3.1-mbd. This would be the Net Decline Rate w/o new capacity and/or EOR.
$this->bbcode_second_pass_quote('', ' ')The facts are that there is good evidence to show Saudi production is stagnating and they are having huge difficulties growing it. I'm not saying they cant, but until I see them go to 12-13 or even 15mbpd, I'll continue thinking we got some serious problems coming.
You will have to wait a very long time. Since 2003, my KSA Annual Outlooks have shown projected Supply in the narrow range of 10.5 to 11.2-mbd. Your expectation of 15-mbd Supply is pure fantasy.
Over the years, the Saudi business plan has been consistent in its desire to implement a plateau. Most production profile models show that the steeper the upslope, the more aggressive the Decline Rate that follows. For its economy (and that of the globe), a plateau is the sound strategy by Aramco.
Last edited by FreddyH on Wed 16 Jan 2008, 02:42:35, edited 1 time in total.
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