Non-OPEC Producers Sqeeuze More Crude

Taking note from the graph in my last post, it's interesting to scope this WSJ blog: it too has taken notice to the slight increase of non-OPEC crude produciton.

Non-OPEC supply fell about 300,000 barrels a day last year, but the IEA now expects it to increase by about 400,000 barrels this year. Since January, the Paris-based agency has upped its non-OPEC forecast by 940,000 barrels of oil a day. Russia alone accounts for 360,000 of that increase with new fields in Western Siberia entering service.

That could be a sign that marginal producers, aided by higher crude prices and falling production costs, are switching on the taps at wellheads previously shut-in because of poor economics.

Of course Sanford Bernstein has to rain in on the parade:

That has other analysts, like the folks at Sanford Bernstein, a little more gloomy. They expect non-OPEC production this year to total 49.57 (Note: this is total liquids) million barrels a day—or 1.43 million barrels less than the IEA estimates. Next year looks even worse, the analysts say, with non-OPEC production falling more than 1 million barrels to 48.46 million barrels per day.

Considering non-OPEC's track record, the 1 mbpd estimated drop of next year may be over- shooting. Cantarell is running out of gas, and without her help, non-OPEC's production (which lost 300,000 bpd last year) would have been at or near the break-even point last year.

- Brewskie

Non-Opec Crude Contiues its Glacial Descent

(Note: Sorry about the small graph. Blogger is demonstrating the wrath of her bugs again.)

The peakers are certainly counting their chickens until peak oil fiesta kicks in. 5%, 8% - who knows, maybe we'll have double-digit decline-rates dragging us down to hell! The only problem is if the decline in non-OPEC crude production is a sign of things to come - the 2004 non-OPEC peak, after all, was an event that threw the peakers into an ecstasy of orgy four years back - it's likely they're going to be very disappointed.

I peaked over at the most recent issue of Oil Watch Monthly to see how things were going; pretty slow as expected, and as evidenced from the graph above, production is a smidgen up this year. From 2005 to 2008, production fell - at worst - a rough 1% - a far cry from the 5%+ dreams of many peakers.

Naturally if non-OPEC production was falling at 5% annually, we would have a load boat of problems: this would translate into about 6 mbpd of loss production, not the rough 1 mbpd. And remember - this is factoring heavy losses from both Canterrell and the N Sea.

The game of the debunkers has never been about denying peak oil, but rather, sifting through the hype, paranoia, rank facts and outright lies to bring a better sense of rationalization of things to come, of how the era of peak oil will materialize.

One should run under this theory to determine the world's fate: if peakers have been dead wrong for the past 100 years in the pre-peak world, they're going to be just as wrong in the post-peak era. If non-OPEC production is any indicator, we can rest assure that when worldwide conventional crude enters its decline, the human race will have plenty of time to adjust, thus preparing itself for the next phase of its energy destiny.

God, we should all be delightful.

- Brewsie

Increased Non-OPEC Production May Frustrate OPEC's Efforts

OPEC's dreams of $80 a barrel of oil may not be coming around for a while...

Total oil supply, excluding OPEC, will stand at almost double the oil group's supply in 2009, according to a new report.

Releasing the data to coincide with yesterday's formal 152nd meeting of its members, OPEC said the non-Opec producers, including Russia, the US, Vietnam, Brazil, Australia, New Zealand and India, will meet much of the supplies shaved off by OPEC cuts

In what may serve as another blow to oil prices, OPEC said around 40 very large crude carriers (VLCCs) full of oil are currently floating in the seas. Analysts say this will ensure that a million-barrel-a-day cut may take two months to make an impact on prices.

The data presented by the organisation showed that the total crude supplies into the global oil markets, other than the OPEC crude to which the cut is applicable, will stand at 55.54 million barrels per day. Demand for OPEC crude is to average at 29.1 million barrels a day, the report said.

While OPEC more than 40 per cent of the global oil demand, it would meet 34 per cent this year, data showed.

[...]

Robin Mills, a Dubai-based oil economist, said Russia has become a key contributor to the still-strong non-Opec supply. "They have always shown their willingness to co-operate with OPEC but have later opted only for token cuts," he said. Russia is the world's largest producer of oil. OPEC estimated Russian oil production in 2009 will average at 9.65 mbpd.

The cartel expressed apprehension the country will increase oil supply this year. "The uncertainty over Russian oil supply remains high as various reports suggest a possibility of a tax cut which may partially support operators' spending and ultimately improve production," OPEC said.

[...]

OPEC said the US supply will grow by 200,000 barrels a day this year. Besides the US, countries like Canada and Mexico may increase production, OPEC said. Supply from Canada is expected to increase by 70,000 barrels a day this year.

[...]

Brazil will be another major contributor to non-OPEC supply this year. "Brazil's supply is to increase 160,000bpd in 2009," the report said. Oil supply from Latin America is projected to average 4.28mbpd in 2009, an increase of 0.2mbpd from a year earlier.

[...]

The estimates still put the number of VLCCs being tied up in storage in February at about 35 to 40 vessels, making up seven to eight per cent of the global VLCC fleet. Mills said this would ensure that any announcement by OPEC to further shave crude supply will take at least two months to make an impact.

"Each VLCC has a storage capacity of two million barrels of crude. Forty tankers would mean 80 million barrels. That's almost a day's consumption of oil. A million barrel a day cut should therefore take 80 days to have an impact on prices," he said.

- Brewskie