Friday, September 4, 2009

2005, Still Peak

It is interesting how much oil numbers change over time. I have been watching the monthly EIA oil production numbers for years. In that time they keep claiming the world surpassed its 2005 production, only to change their mind and downgrade the production numbers.

Here are the values for the last Decade of oil production in thousand barrels per day:
1999: 65 922
2000: 68 495
2001: 68 099
2002: 67 158
2003: 69 433
2004: 72 481
2005: 73 728
2006: 73 466
2007: 72 989
2008: 73 709
2009: 71 847

The reason this jumps out at me in three months ago, the 2008 numbers were a little higher than the 2005 numbers. Six months ago the 2008 numbers were a lot higher than the 2005 numbers. As time passes the 2005 peak seems more and more likely.

This information alone isn't terribly interesting. Production dropping for oil on a four year time scale isn't that unusual, much more than that happened in the early 80s when the floor dropped out of the price. What makes this surprising was that in 2005 the price of oil averaged only $55 a barrel, less than the $62, $66,and $92 for the following three years. These high prices mean that for those years every country in the world was trying to squeeze as much oil out of the ground as they could. Despite all that effort though, production actually dropped.

Even more surprising, today the price is up around $70 a barrel. Near historical inflation adjusted highs for the time period before 2006. Only from 1979-1982 was oil more expensive than it is now. This despite a huge decline in demand. That really does jump out and scream peak oil at me. However to really be sure I would want to see what the price and production do when the economy recovers. I haven't been watching the numbers as much recently because the last year is a nightmare to make sense of.

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