Building a world of
resilient communities.



Peak oil notes - Dec 19

Mid-Week Update
New York oil has traded in a narrow range around $97 a barrel this week as the markets waited for the Federal Reserve decision on bond purchases. After the decision was announced that the Fed will reduce monthly bond purchases by $10 billion to $75 billion a month, oil prices rose to close at $97.80. The Fed’s forecast that unemployment will fall as low as 6.3 percent by the end of next year, and the report that US crude stocks fell by 2.9 million barrels last week,  contributed to Wednesday afternoon’s price jump. Brent oil prices, which closed Wednesday at $109.63, have been more volatile this week on mixed reports concerning Libyan oil production.
In addition to the 2.9 million barrel decrease in the US crude inventory, the EIA also reported that inventories at Cushing, Okla. declined by 600,000 barrels last week, the biggest drop in three months. US crude production slipped by 17,000 b/d last week to 8.06 million b/d.  North Dakota and Texas officials have been complaining lately that bad weather has been hampering drilling and fracking operations. Hundreds of new wells must be completed each month to maintain output at the previous month’s levels.
The US Energy Information Administration seems to have gotten itself out on an optimistic limb in the release this week of the preliminary summary of the 2014 Annual Energy Outlook. The Administration is now saying in the reference case (they claim they don’t make forecasts) that US oil production will continue to grow by some 800,000 b/d for the next three years so that crude output will hit 9.5 million b/d by the end of 2016. This is very close to the all-time high of US oil production which was reached in 1970. The Administration says that shale oil production will then level off for four years and then decline slowly after 2020.  
US Shale gas production is to do even better. The EIA says that it will grow steadily between now and 2040 registering a 56 percent increase in production to 37.6 trillion cubic feet.
Needless to say there are many analysts who believe that shale oil production data do not support a projection that US crude output  will increase by another 2.4 million b/d in the next three years. While the rate of increase in shale oil output has indeed been spectacular in the last few years, many note that the rate of increase starting to slow as the industry has already drilled the best prospects.  Replacing the rapid depletion from the wells that are already producing 2 million b/d of shale would require the completion of many hundreds of new wells each month if shale US shale oil production were to be maintained at 4 or 5 million b/d.
In the Middle East, the nuclear talks with Iran will restart this week; Libyan oil production is clearly not going to rebound from the 100,000 barrels or so of exports a day; the killings in Iraq continues apace; the Saudis are mad at the US for not doing more in Syria; Assad keeps blowing up his own people as fast as he can; and the violence in Lebanon is clearly on the rise. The only good news is that Baghdad seems to be coming to its senses and will offer better terms to international oil companies for the development of the Nissiriya oil field.
A majority of Mexican state legislatures have approved the constitutional changes that will end Pemex’s 75 year monopoly on Mexican oil production.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


Oil and Gas Activities Behind Texas Earthquakes Since 1925, Scientists Conclude

If you've felt an earthquake in Texas at any point over the last four …

But What's the REAL Energy Return of Photovoltaic Energy?

According to a recent, comprehensive study of the scientific literature (1), …

Peak Oil Review - May 23 2016

 A weekly roundup of peak oil news, including: -Quote of the week -Oil …

This is Peak Oil

In the last press review of 2015 I asked if that had been the year petroleum …

Saudi Arabia is planning for the post-oil era, why not the United States?

The world's largest exporter of crude oil, the Kingdom of Saudi Arabia, …

The Other Fire: Fort McMurray's Slow Burn

At the end of the day the $10-billion wildfire that consumed 2400 homes and …

Peak Oil Review: A Midweek Update - 19th May 2016

 A midweek update. Oil prices hit new 2016 highs approaching $50 a …