Lower oil prices, sanctions, and regional instability have caused oil production in Iran, Iraq, and Libya to be depressed. Production in Africa is running into roadblocks caused by low oil prices. And yet oil producers are selling oil as fast as they can — out of fear that a global oil glut will depress prices to much lower levels. Canadian production is under pressure, and some US producers have filed for bankruptcy.
And still oil production in Saudi Arabia, Russia, and the US continues at high levels, and oil analysts are looking at an extended oil glut on world markets.
The market is flooded with oil and everyone is desperate to sell quickly, so you have a price war,” a marine-fuel trader in Singapore, the largest ship refueling hub in the world, told Reuters as prices for bunker fuel oil are plunging.
… “We have plenty of crude,” explained Ahmed Al-Subaey, Saudi Aramco’s executive director for marketing while in India to discuss with Indian oil officials supplying additional oil. “You are not going to see any cuts from Saudi Arabia,” he said. Saudi Arabia produced 10.3 MMbpd in May, its highest rate on record.
So forget the long-rumored decline of Saudi oil fields. For Saudi Arabia, it’s a matter of survival. It has cheap oil….
Russia produced 10.71 MMbpd of oil and condensate in May, a hair lower than its post-Soviet record set in January, and within reach of the Soviet record of 11.48 MMbpd set in 1987. Russia is not cutting back either. It needs every foreign-exchange dime it can get. Its oil & gas sector is its economic lifeline.
And US oil producers aren’t backing off either. They idled 60% of their drilling rigs, slashed capital expenditures, laid off tens of thousands of workers, and shut some facilities. A number of companies in the oil patch have filed for bankruptcy. But US producers are pumping more oil than before. __ http://wolfstreet.com/2015/06/16/biggest-glut-in-crude-oil-history-takes-shape-us-russia-opec-saudi-arabia-production/
US production can continue at high levels for some time yet, due to the large backlog of already-drilled wells, waiting to be fracked.
Despite wild gyrations in granular production data that might point at a leveling off or even a decline in one or the other oil field, overall US production, based on the weekly estimates by the EIA, soared to 9.61 MMbpd in the week ended June 5. A new all-time record, and up 13.6% from a year ago! Note the relentless trend line:
Oil production in Iraq is hampered by ISIS and inter-tribal squabbles. Production in Iran is held down by international sanctions. Libyan oil production is hamstrung by tribal and religious fighting. African oil production is held back by violence, theft, corruption, and inefficiencies.
In spite of it all, the world is looking at the longest oil glut in over 30 years:
The world is on the brink of the longest-lasting oil glut in at least three decades and OPEC’s quest for market share makes it almost unavoidable.
… The glut could swell further if Iran and world powers reach an accord on the Islamic Republic’s nuclear program by their June 30 deadline, Commerzbank predicts. The country could boost exports by 1 million barrels a day within seven months of sanctions being removed, Oil Minister Bijan Namdar Zanganeh said in Vienna on June 3.
Violent unrest in Iraq, Iran, Syria, and across parts of Africa, have not led to higher oil prices, as they might have done in the past. Peak oil doomers appear to be at a loss to comprehend how their supports have fallen out from under them.
“It seems to be taking longer for the oil surplus to clear, and, even without the return of Iran, IEA data indicates it could last for the rest of the year,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. “Any expectations the oversupply will be gone by 2016 don’t look justified at this stage.” __ http://www.ttnews.com/articles/basetemplate.aspx?storyid=38578&t=World-Facing-Longest-Oil-Glut-in-at-Least-Three-Decades
A lot of countries, companies, funds, doomers, and individuals “bet the bank” on ever-rising oil prices. They are learning that predicting anything is difficult — but especially the future
One of the most important lessons of global energy and other “scarce” materials, is that the limiting factor is the human mind.
There is a lot of cheap oil remaining in the middle east. But expensive oil becomes cheaper as the technologies advance. And cheap hydrocarbons such as coal, gas, gas hydrates, kerogens, bitumens, etc. can be converted to affordable fuels, fertilisers, lubricants, plastics, textiles, and other valuable materials. No oil required, once high temperature nuclear reactors make the alternatives workable.
The only shortage is the shortage of ingenuity — and raw human courage. Modern dumbed down doomers and defeatist greens and leftists are trying to kill the human future — but it will be a much harder task than they have assumed.
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More: According to mainstream analysts, how much oil is left?