Note that world oil production has been on a plateau, from late 2004 to the present, with a small dip when prices dropped in late late 2008 to early 2009. This graph considers crude and condensate only, excluding natural gas liquids and other forms of liquid energy, such as biofuels.

My post is mainly an update to OPEC's Spare Crude Oil Capacity - Will it Disappear by the End of 2011? , based on data which the EIA reported in the past few days. I will also briefly present updates to recent developments in OECD and Non OECD oil supplies/consumption.

DISCLAIMER: The author holds no positions in the oil/energy market that may be affected by the content of this post.

NOTE: Scaling varies from chart to chart and some charts are not zero scaled. Labels indicate whether graphs are on an "all liquids" or "crude and condensate" basis.

Over the period covered by the graph (2001 to present), growth in Non OPEC supplies have primarily come from Russia. Oil supplies from the "Rest of World" (ROW) have not grown.

The long bumpy plateau from 2004 to the present illustrates that huge swings in oil prices in recent years have had only small effects on crude oil and condensate supplies.

EIA in their STEO (Short Term Energy Outlook) for September 2010 projected a slight decline in OECD and Russian petroleum supplies from 2010 to 2011. Under most circumstances, it could be expected that most of these declines would be offset by growth in OPEC supplies.

It is expectations like these that will make 2011 an interesting year to follow developments in global oil supplies. If the wheels on the global economy remain on, global oil supply may be stretched, as I pointed out in my earlier post.

In the recent months, petroleum consumption within OECD has seen some growth and this coincides with the recent growth in the oil price.

This diagram shows that the recent oil price growth happened as OECD again started increasing oil imports. This is one of the indicators suggesting that the oil price now has strong support based on fundamentals.

Recently, demand for petroleum products from Non OECD seems to have leveled out as illustrated by the 3 MMA (3 Month Moving Average). (I use the 3MMA both to more easily identify seasonal variations and also to act as a “pilot” for trends over several months.)

The recent data from EIA shows a small growth in supplies of crude oil, condensates and NGLs from OPEC. (Lease condensates and NGLs are presently not part of OPEC's quota arrangements.)

I believe most of present global spare marketable crude oil capacity is to be found amongst the 3 exporters presented above. Saudi Arabia increased their crude oil supplies by 200 kb/d between April and June of this year. It is not clear whether one can conclude that this caused some retreat in the oil price, but it is an interesting coincidence.

Total crude oil supply from the 9 OPEC members above have remained relatively high and flat during the recent months, suggesting that these countries are pumping at maximum levels, regardless of price.

In summary, September's International Petroleum Monthly confirms a continuation of the trends I had noted in my earlier post. The next 15 months may be interesting ones!

SOURCES:

[1] EIA, INTERNATIONAL PETROLEUM MONTHLY, SEPTEMBER 2010

[2] EIA, INTERNATIONAL ENERGY STATISTICS

[3] EIA, SHORT TERM ENERGY OUTLOOK, SEPTEMBER 2010

