The Dept of Energy updated oil production stats for August yesterday. World crude oil and condensate production took a pretty big drop in August to 72,512,000 barrels per day.

Peak production remains May ’05 at 74,298,000 bpd.
August ’07 production lowest since August ’04.

2005 Average 73,805,000 bpd
2006 Average 73,543,000 bpd
2007 Average 73,096,000 bpd


google "EIA t11d" for the numbers

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1982 300TD 279K.
1984 190D 5sp 265K

What do you think made the numbers fall?

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

Tell me this: since when did 1% represent a "pretty big drop?"

Jeez.

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Never a dull moment at Berry Hill Farm.

Any drop in oil is good...I'd still like to know why the drop.

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

Demand is increasing, and production is dropping. Buy your energy stocks now.

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1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

It's big because it's never happened before. In the past, high demand, high prices, good economy = more oil production. This is a whole new ballgame.

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1982 300TD 279K.
1984 190D 5sp 265K

97.00 freaking dollars today. In July it was 56.00.....

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

Part of it is due to transportation issues. For example, there is lots of oil under Iraq and lots of oil in Central Asia. Getting it out is the problem.

Also, the Russian kleptocracy has robbed so many oil companies that major companies are refusing to do business in Russia.

B

That's a complicated question. Here's my short summary: A big portion of the world's oil is produced from giant oil fields that were discovered 25-50 years ago. Several of these are starting to decline. The last of the truly giant oil fields were put into production in the ‘70’s. The new oil fields being discovered are smaller and will not compensate for the decline of the giants. See Saudi's Ghawar field, Mexico's Cantarell, the North Sea field, Alaksa's North Slope, Kuwait's Bergen.

Spend about a week reading theoildrum.com. The future may not be what you expect.

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1982 300TD 279K.
1984 190D 5sp 265K

It has nothing to do with "peak oil" or any other doomsday scenario. The global economy is currently in a cooling-off period and hydrocarbon production follows the economy. In short, it's all based on demand and the ability to meet demand is in itsself, significantly affected by global refining capacity.

One more thing. A HUGE part of the current BBL price of oil is driven by speculation on the disruption of supply. Today's high came on the bombings in Afghanistan. Tell me: How much oil comes from Afghanistan ?

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Never a dull moment at Berry Hill Farm.

I thought we had that pipeline done already...alot of oil is from there, that's why we went to war isn't it, so we'd have a straight shot to that oil?

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

That's a proposed natural gas pipeline. Afghanistan has reserves but no measurable oil production that I know of.

You're kidding, right?

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Never a dull moment at Berry Hill Farm.

of course, don't be ridiculous.

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"It's normal for these things to empty your wallet and break your heart in the process."
2012 SLK 350
1987 420 SEL

Just checking...

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Never a dull moment at Berry Hill Farm.

Refining capacity and Afghan bombings. No oil from Afghanistan - you’re absolutely right, headline makes no sense. Just like the media continual harping on refining capacity.

Excess refining capacity by definition has increased by 1.8 million bpd from whatever it was in May ’05. Less oil same number of refineries. The DOE reported refineries operated at 86.2% of their operable capacity last week, lowest number in few years and trend is down. Show me some statistics that show refinery capacity is short. Articles on cnn.com don’t count (see media comment above).

Also explain the logic of the refinery capacity argument. The consumers (refineries) of oil have limited capacity = a lower relative demand for oil. Logically oil prices should be depressed with refined product prices being high. Refineries should be making money like there’s no tomorrow. (Hint – go look at Valero’s earnings report from today, not happening. Valero complaining of low margins, while oil price is $96.90 today.)

PS. I’ll stop arguing now. You’re mind is probably made up. It’s just that I work in the oil industry and spend several hours a day researching this stuff and I end up with a lot of opinions.

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1982 300TD 279K.
1984 190D 5sp 265K