Oil Production Increasing Again
Oil production rose briskly from 2002 through 2004, before appearing to hit a peak in 2005. That peak fueled more discussion of peak oil theory. However, rising prices have induced additional supply:
Since last August, however, production has been on the increase again. (I consider the last observation, April, to be month-to-month noise in the data.)
Why have prices been rising so rapidly with rising production? Got to be demand growing even faster. That demand is likely to cool, though, due to slower U.S. economic growth and higher fuel prices in China. (Their prices are controlled by the government, which recently hiked them.)
Comments
Nice chart of the data. Looks to me like world oil production has been essentially flat during the past four calendar years. This despite a more than doubling in the price of crude oil during that time.
The more crucial question is what is likely to happen to annual world oil production totals in the coming years. Mathew Simmons’s analysis, regarding likely Saudi oil production going forward, in his prescient 2005 book “Twighlight in the Desert”, seems to be well researched and well reasoned. The upshot: within five to ten years world oil output is very likely to be substantially below current levels. This likely scenario has huge economic and social implications for all nations.