Oil Production Is Up Worldwide

Image by Barrybar via Flickr

Worldwide oil production is up which, according to supply and demand, would drive prices down.  OPEC is determined to keep oil prices between $70-$80 a barrel.

They will have a harder time doing that now that other countries are producing oil and the US even has a surplus.

Falling Oil Demand Terrifies OPEC, Spurring It To Restrict Production

Falling oil demand from the world’s developed nations (OECD nations) has terrified the Organization of Petroleum Exporting Countries (OPEC). They’ve just maintained previous oil production restrictions.
FTAlphaville: The Organisation of Petroleum Exporting Countries meeting in Luanda, Angola, agreed on Tuesday to leave oil output curbs unchanged, while calling for greater compliance with existing output targets.

OPEC: The Conference observed with great concern that, whilst the worst of the recession appears to be over, the world economy remains confronted with the deepest, most wide-spread contraction since the 1940’s. For the first time since the early 1980’s, world oil demand has declined for the second, successive year.

This chart, via FTAlphaville, shows exactly what keeps OPEC up at night. One benefit of the past crisis and high oil prices is that the developing world has beeen spurred to use oil more efficiently and seek alternative forms of energy.    –more

Energy Deflation Cometh: Plentiful Shale Gas, LNG, Ethanol, Nuclear, Geothermal

Consumers rejoice. Investors beware. Environmentalists lament.

Fossil fuel prices are just about to nose dive. Massive new supplies of energy are coming on stream worldwide. Shale gas has flipped the United States from gas importer to gas surplus. Liquid natural gas (LNG) supplies from Qatar, Algeria and Russia are flooding European and Asian markets. Ethanol production in the US is outstripping demands.

Huge new oil fields in Iraq, Saudi Arabia, Brazil and Ghana will cause an intermediate-term surge in crude oil production. Iraq alone will be producing 5 million more barrels of oil per day within just five years; Brazil will become an oil exporting nation.

The sudden ‘political correctness’ of nuclear power in Germany and the United States, coupled with new plants in China and perhaps Iran, will further shift the energy equilibrium toward ‘cheap’. Water source or geo-thermal technologies like the residential heat pumps offered by FHP Manufacturing are cutting home heating bills by 70%. All of these new ‘conventional’ sources don’t bode well for expensive renewal resources like solar and wind.    –more

Related oil production articles

• Energy prices heading downward for the holiday (seattletimes.nwsource.com)
• Barreling Ahead: Oil tops $70, Defying Gloomy Predictions (blogs.wsj.com)
• Oil rises to near $75 amid US crude supplies fall (seattletimes.nwsource.com)