TomDispatch has a new article from Michael Klare on what he calls "The Collapse of the Old Oil Order " - Michael Klare, The Coming World of "Peak Oil Demand," Not "Peak Oil".

Klare views the discord amongst oil producers (evident at the failed talks aimed restraining supply in Doha) as another sign of weak demand for oil in the coming years and a fight between suppliers for market share. He also notes Saudi Arabia is claiming it will raise production from its current 10.2 million barrels per day to 11.5 million barrels and could add another million barrels in the next six to nine months.

At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.

This is no theoretical construct. It’s reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted.

Platts has a look at Mexico's declining oil reserves - Mexico's reserves slashed by a fifth. The article also notes that the West's biggest integrated oil companies also failed to replace, on average, their production with new reserves for a second year running, with just half of all production replenished over the year.

"ExxonMobil, Chevron, ConocoPhillips, BP, Shell and Total saw their combined proved oil and gas reserves slip to 84.6 billion boe last year, the biggest year-on-year drop and the lowest level in eight years."

Julian Lee at Bloomberg has a look at Saudi Arabia's rapidly growing drilling program and their efforts to grab back market share - Saudi Oil Gambit Moves to Phase Two.

10 years on for the great surge of peak oil speculation, it has been interesting to see that Saudi Arabia and Russia have both managed to maintain (and expand) production of conventional oil. The US managed to attain its own peak of production once again off the back of unconventional oil extraction but the article notes even that is falling off again (by around 600,000 barrels per day so far) now new drilling has almost stopped in the shale regions.

The article notes that Saudi Arabia is expanding the Shaybah field by 250,000 barrels a day and Khurais by 300,000 barrels as part of an effort to build production capacity of more than 12 million barrels per day - 2 million barrels above its current rate. Kuwait also plans to raise production capacity to 4 million barrels by 2020 and Abu Dhabi to up production capacity to 3.5 million barrels a day by 2017.

In a slightly older article, Bloomberg also made some comments about speculation that Saudi Arabia may float part of Aramco - "don’t forget the warnings given by Saudi Arabia’s petroleum minister just over a year ago that global oil demand growth may face a "black swan" in the next few decades. Viewed through that lens, the policy of pumping more barrels out now looks like not merely a strategy to maintain market share but also to simply monetize reserves that might otherwise be left to mire underground" - Saudi Aramco's Fire Sale.

Stuart at Early Warning has returned with one of his once monthly oil supply updates - Oil Supply Update.

Nothing very dramatic happened in the last three months: supply continued to inch up, and prices are a little lower than during most of the last couple of years, but $100 remains an effective floor for Brent ...

This last picture shows also (green line) the narrower definition of oil given by "Crude and Condensate", which has been flatter than the "all liquids" represented by the black line.

Stuart at Early Warning has his monthly oil supply update up - Monthly Oil Supply Update.

Stuart at Early Warning has an update on Saudi oil production - Saudi Arabian Oil Production.

The above graph shows Saudi production of crude and condensate (ie oil) from 1995 through July. There are several data sources, but the black line is the average. The red curve is the number of oil rigs working in the country, and is a rough proxy for the level of effort being made to maintain or increase production. ...

It is unclear how much further Saudi Arabia could increase production - they never provide sufficient detail to verify claims as to spare capacity. The conservative view is that they can only increase to previously demonstrated levels - in this case, that is only a few hundred kbd above the present level. If that were the case, a fairly modest disruption in oil supply anywhere on the planet would be enough to trigger sharp price increases (much as the Arab Spring did).

Stuart at Early Warning has his periodic oil production update - Monthly Oil Supply Update.

The IEA is reporting a new high of global liquid fuel production in July, only a little shy of 92mbd (see graph above). OPEC does not agree, and of course the figures are often revised, so we'll have to see how this shakes out. At a minimum, it gives us something to think about, global oil supply having been a deadly dull flat series for the last couple of years. Maybe it's about to increase again?

Energy Forum has a good graph of global oil production segmented by discovery date - Global oil production by discovery date.

Stuart at Early Warning has a look at global oil production trends - 2012 Global Fuel Supply Still Flat.

I seem to be the only person paying much attention to this, but I still think it's significant. May figures for global liquid fuel supply are out from OPEC and the IEA and they continue to show that global supply has increased very little since January (in contrast to the very strong increases in the second half of 2011).

Other things being equal, we would expect this to lead to rising prices. Instead, prices have been weak/falling as a result of Eurozone fears. The fears about the eurozone are legitimate, but still, at present the global economy has got to be growing, if a little weaker than normal. Only Europe is actually contracting at present and that mildly. Thus, if the fears do not translate into much more pronounced global contraction in reality fairly soon, oil prices could jump up quite a bit. On the other hand, of course, if Europe does turn into a full-blown financial crisis then they could fall further.

There is a strong Schrodinger quality to the oil markets at present: prices are a superposition of the state in which Europe turns into a major global financial crisis, and the state in which it doesn't. I wonder how long before the measurement is made?

Stuart also has a look at oil production in Iraq and some of the dodgy reporting of production trends- Is "Soaring" the Right Word Here?.

Ten days or so ago, I posted the graph above under the headline "Sharp Uptick in Iraqi Production". I chose my words carefully - "uptick" to indicate that this was a movement upward of the same general order of magnitude as other recent movements in the time series, and "sharp" to emphasize that, as upticks in Iraqi production go, this was a somewhat larger and faster one than has been typical (but not, in my judgement, so great as to make the use of "uptick" misleading).

Yesterday, the New York Times decided to report on the same development under the headline "Oil Output Soars as Iraq Retools":

BAGHDAD — Despite sectarian bombings and political gridlock, Iraq’s crude oil production is soaring, providing a singular bright spot for the nation’s future and relief for global oil markets as the West tightens sanctions on Iranian exports. ...

I don't object to the graphic. Nor of course do I disagree that Iraq's production has increased and is likely to increase further (I've been covering this for a long time).

But I do really question whether the sober grey-lady paper-of-record should refer to an increase of about 300kbd above the level of last fall as "soaring" in the present tense. I don't think so. I think "soaring" carries a strong connotation of already being way up in the air, or ascending very materially and rapidly. I don't think 300kbd merits that term. I think, if we wanted to use a flight metaphor, we might reasonably say "has begun to take off" or even "looks set to soar". But I think the use of "soaring" in the present tense is an exaggeration. I think this fits in a long-standing pattern at the New York Times of distorted coverage in which positive oil market developments are over-hyped while negative ones are minimized.

Stuart at Early Warning has a post on the flat production profile of the major international oil companies - Oil Production of the Top Three IOCs.

The [graph] shows the liquids production of the three largest international oil companies (IOCs), as compiled from their annual reports. You can see that by and large these companies are about the same size they were 15 years ago, in oil production terms (the partial exception is BP which managed to buy into a Russian oil company half way through the last decade). The big IOCs have not been able to increase production much in response to the high prices of the last six or seven years.

It's important to note of course that since the 1980s most oil is not produced by IOCs but rather by the various national oil companies. Also it's worth noting that IOC revenues and profits have grown enormously over the last 15 years as oil prices have increased so much - they are basically selling roughly the same sized stream of liquids for far more money.

Stuart at Early Warning has a post on reviving global oil production - Exceeding the 2008 Peak of Oil Production.

The peak of monthly production was in July 2008. The trough in the depths of the global recession depends on which series one looks at, but I have been examining the recovery from May 2009 onward. And at this point, the latest figures show us about 1.3mbd to 1.4mbd (mbd = millions of barrels/day) away from reaching the July 2008 peak again.

A few days back, I analyzed the composition of the recovery from May 2009 to the most recent figures (based on IEA OMR data). That showed the recovery coming from a variety of countries, but with two-thirds of it coming from non-OPEC countries, and only about 0.7mbd coming from OPEC. ...

As you can see, in contrast to the recovery composition, the decline came almost entirely from OPEC's voluntary cutback in the fall of 2008, with about 3.3mbd of reduction from OPEC, and less than 0.2mbd of reduction in non-OPEC production.

Given that OPEC has only restored about 0.7 out of 3.3mbd of cutbacks, about 2.6mbd of previously demonstrated capacity remains unused. This is about twice as large as the 1.3mbd or so distance from where production is now to the July 2008 peak level.

Therefore, if the global economic recovery continues, and in particular if OPEC is willing to restore their production cuts at prices that don't derail that recovery, then it appears likely that the July 2008 liquid fuel production level will be exceeded.

This is true even if one assumes nothing about Iraqi production increases.