Friday, May 23, 2008

Ramblings on oil statistics

In May 2005 the world produced an average of 74, 298 thousand barrels of oil a day. Despite oil prices increasing there was not a month that matched that average in all of 2006. There was also not a month that matched it in all of 2007(although some initial numbers said there was, they were eventually revised down)

I am therefore somewhat surprised that Jan 2008 this number was finally surpassed after 2.5 years. The world averaged 74 431 thousand barrels a day. It was then beaten by even more in February when the world averaged 74 657 thousand barrels a day. I am therefore pretty confused why oil prices are picking now to skyrocket. It really seems like this year is the year that oil production is finally going somewhere, albeit it very very slowly. Maybe after February production dropped(I won't know for a few months since EIA numbers are usually three or so months behind), or maybe this gain was just too puny to get any real notice. It after all is less than a 1% gain on a two year old record.


amethyst said...

Has oil use been on the rise? Maybe there's just a higher demand pushing up the prices.

glmory said...

Here is where it gets complicated. The price of oil has doubled in a year. Production is essentially unchanged, or a tiny bit up. It is almost certain in my eyes increased demand has caused the rise. However since oil use hasn't risen much many people try to claim demand hasn't been rising.

My view is using the same amount of oil(and the oil is clearly getting used, not stockpiled) at double the price means a dramatic increase in demand, where the supply has strong constraints keeping it from increasing. If you write out the econ 101 graphs it all works out, but you find that the supply curve probably decreased a bit to account for how tiny the production increase has been, although it might just really be that flat.

My latest hobby has been submitting to reddit's energy subreddit. You find in the articles there that no one really agrees much on anything with oil.