Global Oil: Profits, Losses, Supply, Demand

Peak Oil Isn’t What it Used to Be

The key figures were a 1 million barrel-day increase in worldwide oil supply during March to an 95.2 million barrels a day, and a 1.1 million barrel a day increase in demand to 93.6 million barrels a day.

As everyone knows when supply exceeds demand there is downward pressure on price which is exactly what’s happening to oil… __ Tim Treadgold

With oil prices still down about 50 percent since June, the global economy is benefitting. The IMF estimated in December that the price crash could boost GDP worldwide by 0.7 percent.

“I believe we are in an era of lower oil prices in the medium term and also in the longer term,” Michael Liebreich, founder of BNEF, said in a presentation at the group’s annual summit on Tuesday. __ Bloomberg by Tom Randall

Oil supply has risen, at the same time that demand for oil has been sluggish. There is reason to believe that oil will reach “peak demand” before it reaches “peak supply.” That is one reason, among many, why “peak oil isn’t what it used to be.”

Examined anyway you like there is a revolution underway in demand which will prove to be as important to the oil industry as peak supply because both economic forces, supply and demand, are absolutely fundamental to determining price.

… In fact, it is now recognized that oil demand in most advanced economies has already peaked thanks to the growth of alternative sources of energy, especially oil’s less polluting cousin, natural gas, while giant strides have been made in the efficiency of vehicle engines. __ Forbes

North American oil production has become the new pivot

Even with a dramatic more than 50 percent drop in rig count, U.S. oil production remains close to 40-year highs. The industry exceeded 9 million barrels in November, and production has been about 9.3 million barrels a day recently. While U.S. production remains high, Saudi Arabian output has increased to 10.3 million barrels, and Russian output reportedly has remained steady, a bearish formula for prices.

Don’t expect demand in emerging markets to expand that much or that rapidly. Most emerging markets are populated by low-IQ peoples who are incapable of sustaining high production high technology economomies. Africa, for example, is largely used as a supermarket for energy and raw materials by more advanced societies — which also seems to be the future for Russia. Most of Central Asia, MENA, and Latin America share the low-IQ curse, with similar bleak economic prospects over the long term.

Economic Success Correlates With National Average IQ More at VDare

Economic Success Correlates With National Average IQ
More at VDare

Another important factor in oil supply/demand is the substitution of cheaper hydrocarbons and carbonaceous materials in place of oil. Natural gas can be substituted for oil and oil derivatives in a dozen ways. The same is true for oil, bitumens, kerogens, coal, and rapid-growing biomass.

A new age of energy will be unlocked with the coming of high temperature gas-cooled nuclear fission reactors. Here are a few PDF files that may help to explain how a revolution in nuclear energy will drive a revolution in the hydrocarbon energy markets:

  1. Unlock the trillions of barrels oil equivalent in oil sands (PDF)
  2. Unlock the trillions of barrels oil equivalent in coal to liquids and gas to liquids (PDF)
  3. Unlock the trillions of barrels oil equivalent in oil shale kerogens
  4. Provide abundant industrial process heat for production of fertilisers, refining fuels, making plastics, etc
  5. Split CO2 into CO to use as a hydrogen carrier
  6. Overturn conventional fears of EROEI and Peak Oil

_Source

This is just the beginning of the changes in global energy production on the way. Changes in energy utilisation will have a similarly huge impact on future energy markets.

If you are a peak oil doomer, and follow the doomer gurus closely, you may wish to make a little room in your worldview for alternative possibilities. Let a bit of light shine into the dark confines of the echo choirs of doom.

Peak Oil: It Just Isn’t What It Used to Be

More: One reason for lower demand in the US —

Another reason for a drop in demand in advanced nations is the demographic winter — lower birth rates pointing to a cascading drop in energy demand as smaller age cohorts grow older in Europe, the Anglosphere, and East Asia.

Meanwhile, advanced technology will lead to increased energy efficiency, increased substitution of cheap feedstocks in place of oil, improved discovery of new hydrocarbon resources, increased production of oil from enhanced oil recovery in established oil fields, more economical methods of converting carbonaceous materials into high value products such as polymers, lubricants, fertilisers, and other materials . . .

To understand what is happening, one should learn more about “the ultimate resource,” human invention, innovation, and ingenuity.



More:

http://www.realclearenergy.org/charticles/2015/04/23/frackers_are_keeping_oil_in_ground_108440.html

http://www.bloomberg.com/news/articles/2015-04-23/u-s-shale-fracklog-triples-as-drillers-keep-oil-out-of-market-i8u004xl

Oil drillers around the world are keeping a lot of oil in the ground, and are putting a lot more into long term storage. They are waiting for oil prices to rise, so that they can gradually release these massive quantities of withheld oil onto the global oil markets.

Global oil demand will not be able to keep up with both active and withheld supplies for some time — at least until a new and more competent US administration is in power, preferably a pro-energy, pro-trade administration for a change.

Advertisements
This entry was posted in Energy, Peak Oil and tagged . Bookmark the permalink.

2 Responses to Global Oil: Profits, Losses, Supply, Demand

  1. jccarlton says:

    Reblogged this on The Arts Mechanical and commented:
    This was utterly predictable. I have a two volume set on the history of oil production from the API. One thing that is clear is that technology has ALWAYS kept ahead of depletion. An that yesterdays unconventional oil become todays supply.

  2. guest says:

    “What is remarkable is that US drillers can produce a third more natural gas today with 280 rigs than they did in 2009 with 1,200 rigs.”

    from US to launch blitz of gas exports, eyes global energy dominance

Comments are closed.