OPEC August Production Flat

The latest OPEC Monthly Oil Market report is out with OPEC production numbers for August 2015.

All charts below are in thousand barrels per day with the last data point August 2015.

Not much has happened since June, OPEC 12 production was up 12,000 bpd in August that is well within the margin of error.

All my charts are taken from what OPEC calls “secondary sources” OPEC nations, especially Iran and Venezuela, often lie about their production. But from the chart above you can see exactly who was up and who was down in August, and by how much.

Saudi is holding steady, producing 10,362,000 barrels per day in August. However Saudi is up 700,000 bpd since February.

Iraq, like Saudi, has been holding steady since June. However Iraq has increased production by 756,000 barrels per day since February.

Saudi and Iraq have a combined production increase, since February, of 1,455,000 bpd.

Everyone else in OPEC has hardly moved since February. Some of the other 10 OPEC nations have increased a little, some declined a little but none except Saudi and Iraq have done anything dramatic.

I had expected Iran to be up a lot in August but alas, nothing much happened in Iran in August.

OPEC has world total liquids supply peaking, so far, in June and down over half a million barrels per day from July to August.

OPEC expects Non-OPEC total liquids to be up a mere 160,000 bpd next year with US and Canada increasing by 300,000 bpd. That means that they expect the rest of Non-OPEC to be down by 140,000 bpd.

This chart gives a better idea of where they expect growth to come from next year, along with where the growth was in 2013 and 2014. This 2016 estimate of Non-OPEC production was revised down by 61,000 bpd from last month’s report. I expect further downward revisions in the coming months.

The page OPEC Charts has been updated with the August production data for all 12 OPEC nations.

Well at least one analysist agrees with me, we are currently at peak oil

Oil: Our ultimate addiction 

The first step to kick our oil addiction is to admit we have a problem, and the longer we wait to do so the worse our problem is going to get. Humans are hooked and oil is running out. Yet the human population, America in particular, is in a state of denial. We either ignore the muffled doomsday calls from petroleum geologists that witness first hand the depletion of our oil supplies, or we simply deny the existence of a problem in the first place. 

Our favorite defense against claims of oil depletion is the low gas prices we currently enjoy. We argue that prices are low therefore supply must high. Anyone with even a limited economics background would agree, yet that’s far too easy an explanation.  

The real story lies with the rise of the U.S. fracking sector. Emergence of this new domestic market poses a threat to Middle Eastern oil giants like Saudi Arabia. Yet fracking is a more costly process than traditional oil extraction. Using this as an advantage, Saudi Arabia began to drive oil prices down to levels that frackers could not compete with. Granted, Saudi Arabian markets feel the heat of revenue decrease as well, yet they will endure while frackers will not. 

Once the competitive threat of fracking has been eliminated, there is no doubt gas prices will be raised higher than ever. So enjoy low gas prices now because they will not last. 

The fact is we are currently at “peak oil.” This is the point in time that we have pumped the maximum amount of oil out of the ground, meaning that from this point forward, we will produce less oil on a global scale each successive year.

The concept of “peak oil” is particularly frightening when you consider our demand for oil each year is increasing. This classic disparity between supply and demand is the root of the energy crisis we will face in coming years. 

But it seems that just about everyone else disagrees:

The Pros and Cons of Sub-$50 Oil

Suffice it to say, the fears of peak oil are now dead and buried under millions of barrels of shale oil. 

And:

Fear and loathing in emerging-market equities

Peak Oil was a cruel illusion and has morphed into a three mbd oil glut.

And this:

The End of OPEC?

Not only was “peak oil” off-base… it was way, way off base. Out in the shale fields, it appears that a new kind of Moore’s Law is at work, with incredible new technologies making wells up to 50% more efficient per year! 

And:

Innovation and Consolidation for North American Frac Sands as Low Oil Price Bites

The hectic pace of shale hydrocarbon exploitation in the US and Canada within the last 10 years has reversed the decline in exploitable oil and gas reserves and pushed so-called peak oil (and gas) decades into the future.

So those declaring the death of peak oil far outnumber those who say peak oil is here today. Fracking, they say, has changed the game. Fracking has made it a brand new ball game and peak oil has completely disappeared from the foreseeable future.

I think there are some folks who are in for a rude awakening.

Peak Oil Barrel