Oil demand looking up
A BBC story today quotes the most recent monthly oil market report by the International Energy Agency (IEA), which said that "demand for oil was running at 82.2 million barrels a day, 750,000 more than previously thought".
"The upwards revision means that daily demand has grown by a record 2.5 million barrels a day this year", according to the report.
Light sweet crude prices have touched $45 in the last 48 hours.
The IEA also says "world demand would rise by a further 1.8 million barrels next year to 84 million barrels a day....OPEC's production capacity would rise by 400,000 barrels a day this year, and by a further 700,000 barrels a day in 2005."
Hmmm. That adds up 700,000 bpd short. Plus, why would demand growth fall be 30% next year unless they expect a rapid fall-off in economic growth? This is not explained.
Other very interesting stories are linked on the same page as this BBC story, for example Environment drives Hummer vs Hybrid row (an American 10mpg Hummer owner defends his big engine delusions).
There is also a very interesting q&a thing (click on the link for "Ask an oil expert") with Dr. Adnan Shihab-Eldin, OPEC's director of research, Dr Leo Drollas of the Centre for Global Energy Studies in London, and Rick Sellers, head of the Renewable Energy Unit at IEA.
Needn't worry about supplies, is the consensus, "reserve growth" and unconventional oil has us covered until 2080. When questioners pressed on this matter, Shihab-Eldin, says just that "production capacity will increase", and Drollas says simply, "we've been there before," referring to the 1970s, when $100 per barrel oil was predicted, but we saw sub-$20 oil in the 1990s.
This last point is quite true, but then the world was still in the midst of major discoveries of new giant fields, the likes of which have not been found since, despite vigorous effort.
M. King Hubbert wrote in 1971 that world oil would peak in 2000. Could Hubbert's analysis have been accurate in the 1970s? Why not? The fact that prices dipped during some intervening periods does not disprove it. I'll be agnostic. Show me the oil. We'll see if the world is producing 115–125 mbd within 20 years, as these analysts suggest will happen.
