Tag Archives: lto

Oil and Gas Production in N America

This post provides an overview of N American oil and gas production utilising the growing mountain of charts to be found in Global Energy Graphed. These charts show the parlous state of the Mexican oil and gas industry that will be the focus of this post. Oil production is down nearly to the point where Mexico will cease oil exports. Gas production is down and Mexico has already become a serial gas importer. Drilling has virtually come to a halt. Continue reading

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Oil Production Vital Statistics December 2016

Global total liquids production hit yet another record high of 98.24 Mbpd in November led by OPEC and Russia! Libya’s drive to restore production is a significant factor with production up 280,000 bpd from recent lows. The US oil rig count has risen for 32 consecutive weeks and US oil production has stopped falling. Production from the North Sea and Asia are in decline as the past low price and drive to restore profitability works through the system. Continue reading

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Blowout Week 158

The signatories to the the Paris Climate Agreement, who include just about every country in the world, agree that the world must cut its fossil fuel emissions drastically if global climate catastrophe is to be avoided. Yet according to Exxon’s just-released Energy Outlook (the IEA and EIA outlooks are similar) the world will be burning more fossil fuels in 2040 than it is now. Does this mean that the world is doomed? Or is somebody missing something?

We continue with stories on the fallout from OPEC’s production cut, followed by nuclear in the US, France, Sweden and China, coal in China and Australia, renewables in China, Europe, and Germany, recent events in UK, roads that recharge EVs in Israel, 2016 ties 1998 for the warmest year on record in the lower troposphere and India solves the carbon capture and storage problem.
Continue reading

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Oil Price Scenario for 2017

Every year around this time I make an oil price “forecast” for fun and have a bet with a friend. A year ago my BAU scenario for Brent was $37 for December 2016. The current front month is $55.80. My friend wagered on $64 leaving $50.50 as the break-even point. It is time to concede defeat and examine why I did so badly?

To cut to the quick, my wag for December 2017 is $60 but we may see $80 some time during the year. Light tight oil (LTO) production has disturbed the historic price-supply dynamic adding uncertainty to predictions. Continue reading

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Oil Production Vital Statistics November 2016

In October, global total liquids production hit a new record high of 97.84 Mbpd led by OPEC and Russia! This was caused largely by the scramble to boost production ahead of production cuts with a datum on October 2016. The US rig count continues to rise and US production has stopped falling. The rest of the oil production world outside of OPEC, N America and Russia continues to suffer under the weight of low oil price. Continue reading

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What is the Real Cost of Oil?

Asking what it costs to produce a barrel of oil is rather like asking how long is a piece of string? The answer can be anything you want between $1 and $500. But of course the cost of producing oil in an ideal world should be well below the price of oil, leaving room for taxes and profits. The global oil market sets the price and producers need to adjust and adapt their strategies to maintain costs below prevailing prices from time to time. That is the theory at least. Continue reading

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Oil Production Vital Statistics July 2016

Global total liquids bounced by +600,000 bpd in June as Canada partially recovered from the Fort McMurray wild fire and Saudi Arabia flexed its muscles raising production by 200,000 bpd compared with May.

Not surprisingly the oil price has wilted to the vicinity of $43 / bbl. But Bull and Bear forces are beginning to equilibrate. Continue reading

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The Peak Oil Paradox

Back in the mid-noughties the peak oil meme gained significant traction in part due to The Oil Drum blog where I played a prominent role. Sharply rising oil price, OPEC spare capacity falling below 2 Mbpd and the decline of the North Sea were definite signs of scarcity and many believed that peak oil was at hand and the world as we knew it was about to end. And yet between 2008, when the oil price peaked, and 2015, global crude+condensate+NGL production has risen by 8.85 Mbpd to 91.67 Mbpd. Peak oilers need to admit they were wrong then. Or were they? Continue reading

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Blowout Week 113

This week Nicholas Stern is in the spotlight followed by US shale producers are finally buckling – or are they? Plus the budding US/Russia natural gas war, China now number one in wind, nuclear power plant costs, EDF calls for EU market reform, German solar “too much of a good thing”, Drax threatens a shutdown, the Didcot accident, Swansea tidal has a competitor, Solar Scotland, the ITER nuclear fusion machine, another battery storage breakthrough, the global warming pause is real and sea levels are rising faster than ever. Continue reading

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The Gatwick Gusher

Rumours are circulating that a hundred billion barrels of oil has just been discovered at Gatwick airport. To place this in context, the UK North Sea has produced around 28 billion barrels of oil since production began in 1975. How could we Brits be so dumb as to miss 100 billion barrels just waiting to be pumped from under the home counties? Continue reading

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Oil Price Scenarios for 2016

Let’s cut to the quick. My forecast for Brent at around this time next year in my BAU scenario is $37. This is grim reading for all those involved in and around the oil industry. Worse still, I think there is high probability that we see sub-$20 oil before the first quarter is out. Continue reading

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Oil Production Vital Statistics October 2015

The “big news” this month is that the banks granted over leveraged, loss making shale oil drillers a stay of execution by continuing to provide credit lines. Consequently, there was no major move in US oil drilling or production though both are trending down. Continue reading

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Blowout week 96

US shale oil gets a stay of execution, coal-to-liquids in Botswana, CSP in Morocco, wind in the Irish Sea, CO2 emissions to keep rising, dismal earnings from oil majors, Turkey sues Gazprom, China to build offshore nukes, German coal plants now “facilities of last resort”…. Continue reading

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Oil Production Vital Statistics August 2015

The main action this month has been on the oil price that continued to slide. Both WTI and Brent set new post-crisis lows but saw sharp reversals on 27th and 28th August last week. Global oil production data remains in its up trend although there are signs from the regions that this may be slowing and reversing. Monthly data revisions continue to obscure the real picture. Continue reading

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OPEC’s Gigantic Blunder

With WTI falling below $40 and perhaps heading for $20, one needs to wonder if OPEC’s strategy is working out as planned? Why are they following this course and what are their goals? The face value explanation, accepted by many, is … Continue reading

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Oil Production Vital Statistics July 2015

The US oil directed rig count was up 31 for the month of July and WTI is down about $11 for the month at time of writing. Global total liquids production was up 540,000 bpd in June. The production momentum built in recent years is proving very difficult to switch off. Continue reading

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US Shale Oil: drilling productivity and decline rates

The main message from this post is that a precipitous fall in US production in the months ahead, upon which most analysts are depending upon to send the oil price higher, may not materialise YET. This is simply the end of round one of the current oil price crisis and the standoff between US shale and OPEC.

Is it good news or bad news that US oil production may not collapse (yet) under the weight of low oil price? It’s certainly good news for US energy security…… Continue reading

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Oil Price Crash of 2014 / 15 Update

Recent history has not repeated and that makes it nigh impossible to predict the future with so many unconstrained variables. Continue reading

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A New Peak in Conventional Crude Oil Production

Since May 2005, global conventional crude oil + condensate production (C+C) has been constrained to a bumpy plateau of around 73.2 Mbpd. That limit was breached in December 2014 with a new high of 74.28 Mbpd (Figure 1). This comes on the back of a prolonged period of record high oil price. It seems likely that the reason for the new high is OPEC abandoning constraint rather than an actual expansion of global conventional C+C production capacity. Continue reading

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Oil Production Vital Statistics June 2015

World total liquids production up 460,000 bpd to 95.7 mbpd
OPEC production up 160,000 bpd to 31.21 mbpd (C+C)
N America production down 250,000 bpd to 19.55 mbpd
Russia and FSU down 10,000 bpd to 14.05 mbpd
Europe down 20,000 bpd to 3.45 mbpd (compared with April 2014)
Asia down 149,000 bpd to 7.86 mbpd Continue reading

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