Fossil Fuels

ODAC Newsletter – June 22

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Oil prices plunged to less than $89/barrel this week, an eighteen-month low, amid deepening economic gloom. Suddenly everyone is in the business of predicting just how far the oil price might fall – Credit Suisse has forecast $50/barrel – and for how long. One particularly interested and anxious observer is likely to be Vladimir Putin. With around 50% of Russia’s revenue coming from oil and gas the Kremlin is worried about the potential for a budget shortfall.

OECD Oil Stocks

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Yesterday, I was musing over the fact that global oil supply has pretty much stopped growing in 2012, and that this seems strange given that prices are falling. My hypothesis yesterday was: the global economy is still growing so oil demand must be still growing. Thus with flat supply, prices should be growing. The fact that they are falling must thus represent fears about the future (Eurozone triggered financial implosion).

Highlights of the 2012 BP Statistical Review

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Last week the 2012 BP Statistical Review of World Energy was released. I always look forward to the release, because the data represent the most comprehensive, publicly available database on energy consumption and production statistics. I have now read through this year’s report, picking out what I believe are important trends and data points.

Peak oil: has it arrived?

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We don’t see a peak for the year 2000, nor we see it for 2005. If the peak had been in 2000 or 2005, we should be already seeing a significant production decline. What we see, instead, is a plateau that has been lasting for the past five years or so, interrupting the growth trend that had been the rule from 1983. So, no peak so far, but clearly “something” has been happening with oil production starting with the first decade of the 21st century, considering also the remarkable increase in oil prices of that period. But what’s happening, exactly? Where is the peak? Should we expect it soon, or is it delayed for a long time?