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The
Latest on Oil
Brian
Trumbore
President/Editor, StocksandNews.com
The debate continues as to whether
or not world oil production is in the process of peaking.
It seems to me from just looking at some numbers,
globally, it's increasingly difficult to find, and
then extract, new supply. Surveys may show that an
abundance of crude exists in some spots, such as a
recent 'find' in the Gulf of Mexico, but getting it
out of the ground is quite another task.
And,
of course, these days you're dealing with unstable
governments and/or their state oil companies, as best
exemplified by the likes of Venezuela, Nigeria and
Russia. They may have the oil, but it's either tough
to get it out because it's downright dangerous to
put workers there, or, because of a lack of investment
and expertise, the oil never finds its way to market.
Then there is the Middle East and little needs to
be said here.
So
I just glanced at British Petroleum's "Statistical
Review of World Energy" and thought I'd pass along
a few key stats on the consumption, production and
reserve fronts.
Consumption
/ Production of Oil
Over
the past ten years, 1996-2006, consumption of oil
in the United States rose from 18.3 million barrels
daily to 20.6 mmbd, or 24.1% of global consumption
of 83.7 mmbd in 2006.
Europe
& Eurasia consume 24.9% of the world's crude and the
Asia Pacific region 29.5%.
Today,
consumption is estimated to hit 86.1 mmbd by 12/07,
according to a recent upward revision by the International
Energy Agency.
So
where is it coming from?
The
United States only produces 8% of the world's petroleum,
6.87 mmbd (for 2006); or another way to look at it
is the U.S. imports 67% of what it consumes.
Canada
produces 3.147 mmbd (3.9% of the global total)
Mexico? 3.683 (4.7%)
Venezuela?
2.824 (3.7%)
Norway?
2.778 (3.3%)
Russia? 9.769 (12.3%
UK? 1.636 (2.0%)
Iran?
4.343 (5.4%)
Iraq? 1.999 (2.5%)
Kuwait? 2.704 (3.4%)
UAE? 2.969 (3.5%)
Saudi Arabia? 10.859 (13.1%)
Libya?
1.835 (2.2%)
Nigeria? 2.460 (3.0%)
Algeria? 2.005 (2.2%)
Angola? 1.409 (1.8%)
China?
3.684 (4.7%)
OPEC?
34.202 (41.7%)
Regarding
the above, some items of note.
U.S.
production has declined over the past ten years from
8.295 mmbd to 6.871. It has risen slightly in both
Canada and Mexico.
Production
has declined in Venezuela from 3.137 to 2.824 mmbd
over that same period.
Norway
has seen production decline sharply from 3.232 to
2.778 mmbd, while Russia's has risen from 6.114 to
9.769 mmbd.
In
Iraq, production was a mere 0.58 mmbd in 1996, rose
to 2.614 in 2000, but then has had a tough time reaching
that figure again, especially since the invasion in
2003, in falling to under 2.0 mmbd. Production in
Kuwait, UAE, and Saudi Arabia has risen from 1996
to 2006.
And
production has increased steadily in the above mentioned
African nations.
---
But
what of proven reserves (assuming the numbers the
governments, geologists and engineers give you are
accurate)?
For
the 20-year period from 1986 to 2006
[thousand
million barrels]
United
States? 35.1 to 29.9
Canada? 11.7 to 17.1
Mexico? 54.9 to 12.9!
Venezuela?
55.5 to 80.0
Russia?
n/a to 79.5
Iran?
92.9 to 137.5
Iraq? 72.0 to 115.0
Kuwait? 94.5 to 101.5
UAE? 97.2 to 97.8
Saudi Arabia? 169.7 to 264.3
Libya?
22.8 to 41.5
Nigeria? 16.1 to 36.2
OPEC
currently accounts for 74.9% of proved reserves.
Non-OPEC? 14.4%
Former Soviet Union? 10.6%
Notes
on reserves:
Peak
oil adherents focus in on Mexico's huge declines in
reserves, while in Norway, in just the past year (2005-2006)
proven reserves have declined from 9.6 mmbd to 8.5
mmbd.
And
there is serious question as to whether or not the
secretive Saudis are jerking us around with their
stated reserve figure.
But
the bottom line is when you look at just the past
year, the BP statistical review shows that proven
reserves have actually declined 1 billion barrels,
globally?1209.5 to 1208.2.
---
The
China Factor
While
for the period 2002-2006, consumption in the U.S.
is basically flat?19.761 to 20.589 mmbd, in China
over the same period it has risen from 5.288 to 7.445
mmbd. Going back to 1996, China produced 3.170 mmbd
and consumed 3.702 mmbd. Today, for the 7.445 mmbd
it consumes, it produces 3.684 mmbd. Ergo, it is importing
a helluva lot more crude.
For
its part, India consumed 2.575 mmbd in 2006 vs. 1.700
mmbd in '96. Obviously, you can see why between China
and India, the 4.5 mmbd+ [today, well over 5.0 mmbd]
increase in consumption is a huge swing factor in
the price of crude, even as consumption in much of
the developed world has stagnated?. which helps explain
today's high prices.
Sources:
BP.com; iea.org
---
Wall
Street History returns next week.
Brian
Trumbore
BUYandHOLD
does not recommend any securities. The security mentioned
above is being used for illustrative purposes only
and should not be regarded as an offer to sell or
as a solicitation of an offer to buy.
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