Figure 1. OPEC production from its members, with values provided by them (OPEC June MOMR)

This surge from the majors has in part led the EIA to project that oil prices will remain relatively stable for the remainder of the year.

Figure 3. EIA estimate of crude oil prices going forward over the next eighteen months (EIA TWIP)

In the short term, and leading into a national election, there is no significant event (short of a hurricane or two) that obviously threatens this projection, though the Iranian situation and the questionable stability of nations in the Middle East and North Africa (MENA) has to remain a concern. Sadly, the continued ill health of the global economy, with no evident savior or realistic plan for growth now visible, means that the demand OPEC projects - 1.17 mbd y-o-y on average this year - may continue to be met.

However, I have given my reasons in previous posts for anticipating that the surge in both Russian production and in the United States are at near peak, and will soon decline. Saudi Arabia's fall will be less dramatic and a little later, but the combination does not bode well for the international supply in the next presidential term.

The big question with Saudi Arabian production to date has been more focused on the production from Ghawar, which at 5 mbd has been the rock on which the overall production builds. But that rock is continuously eroding under the long production periods that its different regions have seen.

The final major new effort to bring new production on line in the overall field was the effort at Haradh, down in the South tip of the field.

JoulesBurn has written comprehensively on this region, beginning with the first well that came into production. In 1979, as the late Matt Simmons pointed out in “Twilight in the Desert”, the three northern segments of Ghawar, Ain Dar, Shedgum and North Uthmaniyah were producing 4.2 mbd of the 5.3 mbd total Ghawar output, with South Uthmaniyah producing another 400 kbd. By 2006 North Uthmaniyah was running at a 46% water cut.

Joules has taken the historic record for that region of the field and made a short movie presentation included in a post that shows how Uthmaniyah was developed over the years.