Update on peak oil

It’s over a month old, and has been overtaken by events in Libya, but I thought it would be useful to show an extract of this update on Peak Oil from the Post Carbon Institute on 20 January (2011).

You can read the full article here, but “The official bottom line is that IEA’s (the International Energy Agency’s) conservative estimate says the world will be consuming 89.1 million barrels/day this year, while currently producing 88.1mb/d. There are only two places the extra oil can come from if we are not to have another damaging and demand killing price spike. Either we draw down global stockpiles or the Saudis increase production.”

OECD stocks fell by 8 million barrels in November and another 33 million in December. And the Saudis have increased production, in response to the dramatic reductions in production experienced in Libya.

As the article continues, the two key issues are “whether demand growth this year will be… only a 1.4 million b/d increase compared with the 2.2-2.7 million b/d increase we saw last year.” And “whether the Saudis really are able or willing to push up production by a million or more barrels/day to keep prices under control.

When the article was written, six weeks ago, the Post Carbon Institute was expecting oil prices inevitably to rise to over $100/barrel.

Events in Libya have brought that rise further and faster than they expected.

I see no reason why prices would fall back.

Again, the full article is here.

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