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Page added on February 5, 2016
Will Non-OPEC Oil Production Collapse In 2016?
The IEA Oil Market Report, full issue, is now available to the public. Some interesting observations:
Non-OPEC oil supplies are sharply lower in December. Overall supplies are estimated to have slipped by more than 0.6 mb/d from the month prior, to 57.4 mb/d. A seasonal decline in biofuel production, largely due to the Brazilian sugar cane harvest, of nearly 0.4 mb/d was the largest contributor to December’s drop. Production in Vietnam, Kazakhstan, Azerbaijan and the U.S. was also seen easing from both November’s level and compared with a year earlier. Persistently low production in Mexico and Yemen were other contributors to the year-on-year decline.
As such, total non-OPEC liquids output slipped below the year earlier level for the first time since September 2012. A production surge in December 2014 inflates the annual decline rate, but the drop is nevertheless significant should these estimates be confirmed by firm data. Already in November, growth in non-OPEC supply had slipped to 640 kb/d, from as much as 2.9 mb/d at the end of 2014, and 2.4 mb/d for 2014 as a whole. For 2015, supplies look likely to post an increase of 1.4 mb/d for the year, before contracting by nearly 0.6 mb/d in 2016. A prolonged period of oil at sub-$30/bbl puts additional volumes at risk of shut in as realised prices fall close to operating costs for some producers.
The IEA has every month of 2016 Non-OPEC production below the year over year 2015 production.
For the past four years, North America has carried the load as far as the increase in Non-OPEC production is concerned. Now the IEA believes North America will suffer the lion’s share of the decline in 2016.
The IEA says U.S. Gulf of Mexico and NGLs will show an increase in 2016 but every other location will show a decline with Texas showing the largest decline.
The IEA says Non-OPEC production was up 1.3 million bpd in 2015 but will be down 0.7 million bpd in 2016. Below are their numbers. They do not include biofuels or process gain.
2014 51.8
2015 53.1
2016 52.4
The IEA has Non-OPEC liquids in December 2015 down about 650,000 bpd compared to December 2014.
But if the IEA expects Non-OPEC production to be down in 2016, how will world oil production be able to meet the ever rising demand? Simple, just pick up the phone and call OPEC. They will supply the needed barrels.
Data from Rystad Energy show the number of completed wells have by far outpaced the number of wells spudded (drilled) since 4Q14. Indeed, the number of well completions per month continued to increase several months after the rig count started to drop off, peaking at more than 1,600 wells in December 2014. The number of completions are still outpacing the number of new wells drilled, and as a result, the number of uncompleted wells, or the frack-log, has been cut down from its peak of around 4,600 wells hit at the end of 2014 to around 3,700 wells currently.
Make of the above chart what you will. I do not understand the spuds going to zero. Spuds are, quite obviously, not at zero. But then it’s not my chart.
And here are a few charts of my own. I thought it would be interesting to make some comparisons between price, rig count and production. In all charts below the right axis is always color coded with the chart data. All data is through December 2015 unless otherwise noted.
(Click to enlarge)
The above rig count is just the oil rig count, not the total rig count. There is obviously a delay between rig count and production. Just how many months that delay is, is not completely clear.
(Click to enlarge)
All price data is from Index Mundi and is the average of three spot prices; Dated Brent, West Texas Intermediate, and the Dubai Fateh, in U.S. Dollars per Barrel. Quite obviously the rig count follows the price with a delay of from one year to as little as three or four months.
(Click to enlarge)
And production follows price, somewhat, with a delay that is hard to calculate.
(Click to enlarge)
Well, production has followed price in the USA and Canada. But elsewhere everyone just seems to be producing flat out regardless of the price. Just as the price was peaking in early 2011, Non-OPEC production, less USA and Canada, began to decline. Production in this chart is only through October.
The recent surge in world production that was brought about by high prices was a USA and Canadian phenomenon only.
53 Comments on "Will Non-OPEC Oil Production Collapse In 2016?"
rockman on Fri, 5th Feb 2016 11:10 am
Should have stopped reading at the title: “collapse” is a meaningless term since he doesn’t define it. And even that collapse is based on a PROJECTION which he admits will be proved (not disproved) when data arrives. But since he seems to like the EIA projections lets stick with that.
https://www.eia.gov/forecasts/steo/tables/pdf/3btab.pdf
4Q 2015: 64.6 mm bopd. Projection for 4Q 2016: 63.9 mm bopd. So essentially his definition of non-OPEC production “collapse” is a decrease of 1%. I wonder what he thinks about their projection for 4Q 2017 showing a return to the 4Q 2015 production rate?
twocats on Fri, 5th Feb 2016 12:04 pm
No
GregT on Fri, 5th Feb 2016 12:49 pm
It would all depend on how one defines collapse. A generally accepted antonym to collapse would be to “expand”. To not expand or collapse would be to remain constant.
I think that it should be fairly safe to say that production is neither remaining constant, nor is it expanding. So in that light, it is already in a state of collapse. How far that collapse might go, is still an unknown.
Boat on Fri, 5th Feb 2016 12:59 pm
GregT,
You do love to make up the rules and what definitions mean. This is why it is impossible to have a discussion with you. The new rule in Gregs world means collapse is anything other expansion. I took a sip of water out of a full glass of water so now the level of water in my glass has collapsed. LOL Reminds me of a song called wild wood weed. Take a trip and never leave the farm.
GregT on Fri, 5th Feb 2016 1:03 pm
Boat,
What part of “It would all depend on how one defines collapse” do you not understand?
Apneaman on Fri, 5th Feb 2016 1:13 pm
Das Boat – wild wood weed – love that song (still have the album.) Years of inhaling PVC fumes will cause the same effect except it’s permanent.
https://www.youtube.com/watch?v=vdlRnWXZ19Q
Boat on Fri, 5th Feb 2016 1:22 pm
GregT,
Let’s see, a significant drop would have to have a lower level in my glass than a sip. A collapse in the amount of water in my glass would be lower yet. Anything other than a full glass does not signify anything close to a collapse. Except in Greg’s world.
shortonoil on Fri, 5th Feb 2016 1:23 pm
“What part of “It would all depend on how one defines collapse” do you not understand?”
It
Our projections, derived from the Model, inform us that world production will fall by 11 mb/d by the end of 2020. That will be reflected in a decline of world GDP by $8.6 trillion per year.
Whether or not that constitutes a collapse is a matter of opinion, but it will certainly be one damn bad depression!
http://www.thehillsgroup.org/
Boat on Fri, 5th Feb 2016 1:25 pm
apeman,
Years of smoking the wild wood weed damages the brain also. So most of my generation has damaged brains. This is not new news.
Boat on Fri, 5th Feb 2016 1:31 pm
short,
“Our projections, derived from the Model, inform us that world production will fall by 11 mb/d by the end of 2020. That will be reflected in a decline of world GDP by $8.6 trillion per year”.
Hold it right there PHD. Just last month you said the worlds oil infrastructure would be toast within 3 years. By 2019 the world is already in total collapse mode. What do you have to say for yourself.
GregT on Fri, 5th Feb 2016 1:35 pm
Boat,
When was the last time that you ever heard of a glass of water collapsing? More of your usual complete and utter, brainless, nonsense.
Do you honestly not understand how stupid you make yourself look?
shortonoil on Fri, 5th Feb 2016 1:41 pm
“What do you have to say for yourself.
The same exact thing I have been saying to the last two years:
http://www.thehillsgroup.org/depletion2_022.htm
Where does that graph bottom out: I don’t know?
GregT on Fri, 5th Feb 2016 1:52 pm
“Hold it right there PHD.”
Says the grade 5 dropout………unbelievable.
Boat on Fri, 5th Feb 2016 2:03 pm
GregT,
A degree must impress you. I have trained a few collage graduates. A couple were great and were quick. About 5 of them were boxes of rocks and never got it. The good ones would tell you no matter the education to be a supervisor in a PVC facility still takes a decade to become a good one. Experience trumps paper documents when it comes to common sense.
GregT on Fri, 5th Feb 2016 2:07 pm
Common sense has nothing to do with experience Boat. You either have it, or you don’t.
You can’t fix stupid.
Boat on Fri, 5th Feb 2016 2:07 pm
I sucked 5 miles of cock last night.
Boat on Fri, 5th Feb 2016 2:13 pm
I see the Canadian boys go back to the cussing and name calling. Wish they had to brains to debate.
GregT on Fri, 5th Feb 2016 2:13 pm
“I sucked 5 miles of cock last night.”
Some things are better kept to one’s self Boat.
GregT on Fri, 5th Feb 2016 2:18 pm
Boat,
STOP, and THINK.
https://kpwebster.files.wordpress.com/2010/09/stopandthink.jpg
rockman on Fri, 5th Feb 2016 2:23 pm
shorty – Like you say: “collapse” is in the eye of the beholder. Just curious about how our cohorts would define “collapse”: does an 11% decline over 4 years make you feel like running into the streets screaming “The “end is near!!!”. LOL. And that’s an 11% decline based upon a model which might be correct…or optimistic…or pessimistic.
It would be one heck of a trend reversal: the last time oil was priced this low (2001 -2005) consumption increased about 10%. It would be an even more dramatic reversal given the rate of increase in oil consumption we’ve seen in just the last year. As always: time will tell. But if consumption going to “collapse” in the next 4 years it better hurry up and do so because we haven’t seen the numbers start heading to the toilet yet.
Jmmy on Fri, 5th Feb 2016 2:28 pm
The article on Ron’s site is titled ‘The IEA’s Oil Production Predictions for 2016’.
The article was reposted to OilProce.com and then this lame site and the title was changed.
It’s not hard to figure out.
GregT on Fri, 5th Feb 2016 2:46 pm
The name of the article was changed to “Non OPEC Oil Production To Collapse In 2016” when it was posted on OilPrice.com.
When it was posted here it was changed to the question; “Will Non-OPEC Oil Production Collapse In 2016?”
Not hard to figure out at all.
Apneaman on Fri, 5th Feb 2016 2:54 pm
Jmmy, if it’s so “lame” – fuck off!
Jmmy on Fri, 5th Feb 2016 3:18 pm
Lol you don’t have to be rude. It’s beyond lame. It’s a peak oil site that posts 2 year old articles, crap from info wars, etc etc. It’s the shallow end of the pool in so many ways. If I ever need to get an update on how stupid most people are I just come here and read the comments.
Boat on Fri, 5th Feb 2016 3:26 pm
Jimmy,
If your pool of wisdom has such width and breadth, let’s see it. I hear it’s beyond lame.
Apneaman on Fri, 5th Feb 2016 3:32 pm
Of course I don’t “have” to be rude. It’s just more fun that way Jimmy. The kids love it. Funny how Americans are totally obsessed with so called rude language, but have no problem living lives based on the murder and plunder of a great deal of other less powerful people (mostly brown). LOOK OUT IT”S JANET JACKSONS NIPPLE _ MASS PANIC!!!!! Of course US foreign policy is now a mainstay in the police state of America. The rudest thing that has ever existed in my life time is the American nation and a good chunk of it’s fucking retard citizens. Again Jimmy fuck off!
Apneaman on Fri, 5th Feb 2016 3:35 pm
George Carlin on soft language
https://www.youtube.com/watch?v=o25I2fzFGoY
shortonoil on Fri, 5th Feb 2016 3:50 pm
“But if consumption going to “collapse” in the next 4 years it better hurry up and do so because we haven’t seen the numbers start heading to the toilet yet.”>/i>
North Dakota, Texas, and Alberta are already essentially welfare states. Nigeria, and Venezuela would be down the toilet except they don’t have any toilet paper to flush it down with. With Mexico its hard to tell?
shortonoil on Fri, 5th Feb 2016 3:56 pm
“If I ever need to get an update on how stupid most people are I just come here and read the comments.”
That’s enough to prove the point!
Jmmy on Fri, 5th Feb 2016 4:18 pm
This site is a catch-all for misfits and fuck- ups. An echo chamber full of dim bulbs repeating their wornout mantras and insulting one another. It’s easy to see.
Apneaman on Fri, 5th Feb 2016 4:28 pm
Jmmy, then why are you here? Slumming so you can feel superior? You’re a fucking worm – a retarded helmut wearing worm.
Jmmy on Fri, 5th Feb 2016 4:32 pm
Hey Apneaman and Short, I have a challenge for you both. How about an original thought? It looks like Short might have had an original thought that one time several years ago but it’s starting to look pretty stale. Got any fresh ideas?
shortonoil on Fri, 5th Feb 2016 4:35 pm
“This site is a catch-all for misfits and fuck- ups. An echo chamber full of dim bulbs repeating their wornout mantras and insulting one another.”
If you are going to be the next, late great Peak Oil News troll you need two things:
1) A plan
2) Some brains
Well, forget the second part; you’ll be retired by the time they appear!
twocats on Fri, 5th Feb 2016 4:41 pm
“The article on Ron’s site is titled ‘The IEA’s Oil Production Predictions for 2016’.
The article was reposted to OilProce.com (and then this lame site) and the title was changed.
It’s not hard to figure out.” [jmmy]
Ron doesn’t use the word “collapse” anywhere in the article. Point to Jimmy. I of course noticed it and had already seen Ron’s post in several other sites with different titles. So that’s why I responded with a one word answer, “no”. I mean, it’s possible that production could collapse, but to think a plateauing of production (as predicted by the first chart) is synonymous with collapse is absurd. People who frequent oil price have either already sold and lost their shirt, or have held on and only virtually lost their shirt.
http://oilprice.com/Energy/Energy-General/Despite-Bold-Predictions-T-Boone-Pickens-Sells-All-Oil-Holdings.html
shortonoil on Fri, 5th Feb 2016 4:43 pm
“Got any fresh ideas?”
Have you ever considered growing a third arm? It probably won’t make you any weirder than you already are, and you might become a world companion Pick Up Sticks player.
Apneaman on Fri, 5th Feb 2016 4:59 pm
Jmmy, regarding what exactly. Your cover all blanket statements indicate that you just don’t like anything that challenges your happy narrative. It’s hurting your feelings, but you just can’t put your finger on it. Hence the over generalizations. Cognitive dissonance because everything they told you is proving out to wrong. Be specific on something you would like to debate. I’m here Huckleberry.
Ron Patterson on Fri, 5th Feb 2016 8:42 pm
Rockman wrote: “Should have stopped reading at the title: “collapse” is a meaningless term since he doesn’t define it. And even that collapse is based on a PROJECTION which he admits will be proved (not disproved) when data arrives. But since he seems to like the EIA projections lets stick with that.”
The title you read was : “Will Non-OPEC Oil Production Collapse In 2016?”. That was not my title at all, the title of my post was: “The IEA’s Oil Production Predictions for 2016”
So lecture OilPrice.Com for their choice of words, not me. Oh, and they are IEA projections, not EIA projections.
Northwest Resident on Fri, 5th Feb 2016 8:56 pm
Collapse is all the rage these days. If you want to grab attention and get people to read your article, just put collapse in the title. It used to be that “heaven” and “hell” were the big attention grabbers — something you KNEW was coming, you just didn’t know when. What everybody wants to know these days is “when will collapse happen”? Answer: Right now. Look around. Collapse is a process, and we are right smack dab in the middle of it right now — more toward the beginning than the end — but well on our way nonetheless.
The Edge of Reason on Fri, 5th Feb 2016 9:06 pm
Collapse = click bait
Jimmy on Fri, 5th Feb 2016 9:08 pm
Apneaman, your talents are wasted here. You should be a psychoanalyst for FBI or something lol
Apneaman on Fri, 5th Feb 2016 9:17 pm
psychoanalyst? You got the first half right.
twocats on Fri, 5th Feb 2016 9:27 pm
The best part about the use of the word “collapse” here is that its being used in a positive sense of “about to collapse so oil prices are about to take off! So get on this gravy-rocket NOW!!” At the gym they play financial news and just two days ago on a major network the banner was “has oil hit a bottom?” or some shit like that and the guy was rambling on for like 5 minutes (as the women anchors nodded adoringly) that the bottom was in and there was nowhere to go but up. Loads of people are going to try and catch this falling knife and someone is eventually going to be right. Just not that guy.
The only real question remains – at this projected rate when will a slowly rising demand (say 1.3% for giggles) intersect with supply? then we shall see.
twocats on Fri, 5th Feb 2016 9:34 pm
Oh, and of course, the OTHER question, the one Ron raises in his article:
“There is obviously a delay between rig count and production. Just how many months that delay is, is not completely clear.” [Ron]
We are going on 13-15 months since the rig count plummet really began in earnest. So when will that production decline really start to hit?
Northwest Resident on Fri, 5th Feb 2016 10:16 pm
“So when will that production decline really start to hit?”
Any day now is my guess. Sooner, rather than later.
Anyway, it isn’t so much a question of when will production (of everything they call oil these days) start to decline. The question is, when will whatever it is they are producing start failing to meet energy required to sustain continued economic growth. Answer to that question: Quite a while ago, and increasingly more so as time goes on.
GregT on Fri, 5th Feb 2016 10:25 pm
” Answer to that question: Quite a while ago, and increasingly more so as time goes on.”
Glaringly obvious, it should be.
twocats on Sat, 6th Feb 2016 12:01 am
I disagree. Economic growth now is so easily manipulated what with double-seasonal adjustments or “blame it on Zika” (coming zoon!) that economic growth will continue way way into peak final decline.
My question was a lot more pedestrian: when will production IN THIS CYCLE actually go down. Here we are 20 months into the price drop and still no significant drop-off. Makes you think oil is abiotic. Makes you think the oil glut really WILL go on forever.
Northwest Resident on Sat, 6th Feb 2016 1:04 am
“growth will continue way way into peak final decline…”
Question: How does the economy manage to grow in an era of (rapidly) declining energy?
It doesn’t. Does it? A growing economy consumes ever more energy, ever more oil, ever more resources of every type. Right up to the point where there isn’t enough left to maintain, much less grow. About where we’re at right now.
It happens to every petri dish, don’t you know?
GregT on Sat, 6th Feb 2016 1:36 am
“It happens to every petri dish, don’t you know?”
Not in petri dishes supplied with a glut of abiotic oil, apparently……..
onlooker on Sat, 6th Feb 2016 2:41 am
Abiotic oil , abiotic air, abiotic water, abiotic fish etc. Yes I can just imagine a renewable planet to be disposed of and wallah magically recreated.
twocats on Sat, 6th Feb 2016 4:35 pm
NW Res,
I’m definitely agreeing with you that actual growth ain’t gonna happen, hasn’t happened in the US for a while, and on a global scale has basically been on a plateau since 2005 when peak oil really started to seize the gears up. My issue is with this statement:
“The question is, when will whatever it is they are producing start failing to meet energy required to sustain continued economic growth.”
And no, that’s not a good question, because they can so heavily manipulate the various economic indicators and numbers that we can easily achieve “growth” without actually having growth.
But, and follow me here, once demand for oil (at this price range) exceeds supply of oil then its really hard to fudge that number because its a physical thing that the bus I use wants and its a physical thing it can’t get. It was never about the artificial thing known as the economy, and all about the physical system of energy use (which the economy is a mere poor reflection of). I think back in 2005 many people believed the economic reflection of the physical society could not suffer the onset of peak oil. Well, it remains to be seen, but so far, the artificial system known as economics as proven to be highly adaptable.