Non-OPEC falling short of numbers...(or, just one reason why oil is at $66/bbl today)

In the International Energy Agency's current market report (link to full .pdf at the bottom of the page), the IEA increased its estimate of growth in OPEC oil production by 250 thousand barrels per day (kbpd) (hat tip, GCC). But the agency then cut its view of non-OPEC supply growth by 205 kbpd, leaving world oil supply at 84.7 million barrels per day (mbpd).

Production outages in North America and the North Sea accounted for most of the shortfall in non-OPEC supply growth. Russia is also pumping less than expected. Furthermore, the IEA cut its non-OPEC production estimate for 2006 by 400 kbpd to 52 mbpd. Here's the rest of the highlights from the .pdf:

WTI and Brent breached $60 in early July as storms threatened Gulf of Mexico oil and gas production. Little damage was seen, but there has been an unusually active start to the hurricane season. Diesel strength and limited spare capacity has increased consumers'/refiners' desire to hedge forward and demand higher stock holdings, driving up prices.

Global demand growth is revised down by 200 kb/d, to 1.58 mb/d, in 2005 due to a weaker outlook for China and the US, but is projected at 1.75 mb/d in 2006. A 1.34 mb/d increase in non-OECD countries is expected to continue to drive global demand growth in 2006. Chinese demand is expected to rebound by 490 kb/d, outpacing the projected 410 kb/d increase for the whole of the OECD in 2006.

Non-OPEC oil supply in 2006 is expected to average 52.4 mb/d versus 51.0 mb/d in 2005. Growth of 0.9 mb/d this year accelerates to 1.4 mb/d in 2006. Less disruption to OECD supply plus continuing strong growth from the FSU, Latin America and Africa underpin the 2006 forecast. There is also emerging evidence that high prices may
be leading to increased upstream activity levels.

Growth in non-OPEC oil and OPEC gas liquids supply in 2006 should match global demand growth, holding the call unchanged at 28.1 mb/d next year. OPEC crude supply in June averaged 29.3 mb/d, down 60 kb/d from May, despite higher Iraqi exports on resumed Ceyhan liftings. The OPEC-10 production target was raised to 28.0 mb/d, effective from 1 July.

OECD total industry oil stocks built by 2.5 mb/d, or by 78 mb, in May to an estimated 2658 mb, or 139 mb above their position last year. The build in stocks, combined with downward revisions to OECD demand, raised forward cover to 54 days in May, up from 53 days in April and 2.5 days above levels of a year ago.

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Techinical question. Anyone know where the IEA gets these numbers from for OPEC production? In Venezuela's case they sure don't match what Venezuela is reporting. They clearly state they back out Venezuela's synthetic crude production but do they also back out oil that is consumed domestically and not exported? If so then their numbers jive with the Venezuelan governments numbers. But if not there is a discrepancy in the IEA numbers.

As long as there is money to be made buying and selling futures, they will not iron out the reporting mechanisms.

All these 'corrections' and such are not an accident, any more than the collapse of Enron was a bookkeeping error.

The link at the bottom of the IEA page goes to the prior month's report.

Listening to BBC News Talking Point, in response to a caller question (Have we peaked? When might we peak?), Dr Adnan Shihab-Eldin, OPEC's director of research, said that Peak Oil predictions were inaccurate because they ignored revisions for the current reserves ("you improve your understanding of the current fields") which could extend the peak 30-40 years or, with tar sands, further maybe until the end of the century.

I have been watching the whole peak oil question since 2003 after I read the then current book by Heinburg. One issue I have not seen addressed much anywhere is the trend in crude oil make up. We always see the gross numbers but I have yet to see the numbers for the specific mixes of crude. There are the benchmark numbers, ie WTI, Brent Crude etc., but what percentage of total production do the light crudes represent and how are they trending, verses the heavy crudes and the heavy sour crudes.

For instance, the weekly report on crude and product stocks, except for gas, in gross numbers did not look that bad this week, yet WTI futures prices do not seem to care. Is this because the light sweet crudes are already in decline and have been for some time? Are they making up a smaller portion of the total production mix?

Whew !! I for one am so relieved.

The "experts" are reassuring the masses that everything is fine here on Island Earth:

The rest of the CNN "special" broken news report can be found at:

So everything is OK now, right?

Human population is not growing at exponential rate, right?
Oil is not a finite, nonrenewable resource, right?
Technology will save us, right?
It is OK to keep building new factories to build more cars that will spew more CO2 into the atmosphere because Global Warming is not "real", right?

Thank goodness.

I thought I was having a bad dream there.


I tried to track down that info on the DOE EIA site. I am sure it is there somewhere and will try again. I also would like to know this. The file (link) below is not exactly what you are looking for, but it is similar. It is an Excel listing of all global crude classes, but by price, not volume. If the link doesn't work, search in Google for the file name PSW13.xls.

I will try to find volume and post on an open link this weekend. At least the file above does show that DOE has data on all the crude classes available on the site.

Re: Non-OPEC

From page 14, Supply Summary

Non-OPEC oil supply in 2006 is expected to recover from two disruption-prone years in 2004 and 2005. Production in 2006 should average 52.4 mb/d versus 51.0 mb/d in 2005. Growth of 0.9 mb/d this year accelerates to 1.4 mb/d in 2006. Key assumptions underpinning the forecast for 2006 are a less disruption-prone performance from the mature OECD producing areas plus ongoing strong growth from the FSU, Latin America and Africa. The forecast coincides with emerging evidence that high prices may be leading to higher upstream activity levels.

And this

Sluggish growth so far this year in non-OPEC production results from a slow-down in the FSU and the onset of seasonal maintenance in the North Sea and North America. Production in Kazakhstan has been revised down by 55 kb/d for 2005. But there are now higher expectations for 2005 output for the US, Mexico, Brazil, Malaysia and Vietnam. Second quarter growth accelerated to 470 kb/d, having slowed in the previous two quarters. Further acceleration is expected henceforward in 2005, with ongoing recovery in the Gulf of Mexico and Russia and with new supply from Azerbaijan, China, Sudan, Angola and Trinidad. Total supply in 2005 averages 51.0 mb/d versus 50.1 mb/d for 2004.

1) FSU production is expected to go up because of Sakhalin-1 Production, right? Going to kick in 3rd quarter 2005. But reserves there are a puny 2.3 billion barrels.

2) higher expectations for 2005 output for the Mexico -- I thought HO mentioned that Mexico has already tipped over into depletion

3) Growth of 0.9 mb/d this year accelerates to 1.4 mb/d in 2006.... less disruption-prone performance from the mature OECD producing areas -- huh??? No hurricanes next year, right? Geopolitical stability here we come!

4) Trinidad -- Finally, this major producer is coming online! We're saved. The U.S. government claims the island's proven oil reserves stand at around 700 million bbl. 8)

5) Sudan -- see 4). EIA reports "Sudan contains proven reserves of 563 million barrels of oil".


I had a look at the site you suggested. The list of crudes from around the world that I saw, with prices, suggest that overwhelming demand is for the light and medium crudes. I'm wondering if all the heavy crudes are listed? In Table 13, World Crude Oil Prices, that list doesn't seem complete. What think you?

What would be most interesting is a list like table 13 showing volumes.