Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

THE International Energy Agency (IEA) pt 2

General discussions of the systemic, societal and civilisational effects of depletion.

Major oil pool found

Unread postby elrod » Fri 11 Jun 2004, 11:33:01

Does anyone have any information on how much this is estimated to be?

http://quotes.freerealtime.com/dl/frt/N ... est%20News
User avatar
elrod
Coal
Coal
 
Posts: 7
Joined: Thu 03 Jun 2004, 02:00:00

Unread postby MrPC » Fri 11 Jun 2004, 11:39:38

400-700 million barrels according to a quick google search on oil sabah discovery barrels - that's under three months supply.

It'd therefore push out the global peak by about 6 weeks (and that's being optimistic, and assuming that the figures didn't include any provision for minor finds like this, which they actually do).
The purpose of human life revolves around an endless need to extract ever increasing amounts of carbon out of the ground and then release it into the atmosphere.
User avatar
MrPC
Heavy Crude
Heavy Crude
 
Posts: 266
Joined: Sun 23 May 2004, 02:00:00
Location: Melbourne, Australia

Unread postby Pops » Fri 11 Jun 2004, 11:44:25

Significant though, I believe there were no 500mbbl finds last year and only 2 the year before.
If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen we must live through all time or die by suicide.
-- Abraham Lincoln
User avatar
Pops
Elite
Elite
 
Posts: 17642
Joined: Sat 03 Apr 2004, 03:00:00
Location: QuikSac for a 6-Pac

Unread postby smiley » Fri 11 Jun 2004, 14:17:16

I did find the amount of 400-700 barrels which would be big if it was the amount of recoverable oil. It would more than double their total proven reserves.

But if this is just oil in place the amount of recoverable oil would be only 150-250 barrels. I suspect that it is the latter and that they just use these inflated numbers to attract investors.
User avatar
smiley
Fission
Fission
 
Posts: 2274
Joined: Fri 16 Apr 2004, 02:00:00
Location: Europe

Let's All Dissect the Latest OMR, Shall We?

Unread postby Guest » Thu 23 Sep 2004, 21:18:03

IEA's latest OMR (Oil Market Report) , which you can get here:

link is not the most exciting reading. So how about we select our favorite bits to enlighten those less intrepid? I'll start:

Page 1 "Two Ends of a Looking Glass": Decribes two opposing camps, one of which has led to "chatter of Saudi reserves, peak oil, and missed company production targets"...
They say "light sweet crude has been in short supply"... Despite this, the IEA is optimistic. They explain why.
Page 4: World Demand for 4Q 2005 is 85.6 mb/d!
Page 13 (summary): "World oil suply increased by 300kb/d in August, similar to July's downward-revised increment. Although non-OPEC supplies declined for the second month running, by 150kb/d, this was offset by a 410kb/d in OPEC crude and 40 kb/d in OEPC NGL, condensate, and non-conventional oil. World supply reached 83.6 mb/d, some 4.3 mb/d higher than a year ago (editorial: an increase of 4.3 million barrels a day in one year and prices are still at this level?!?)

The non-OPEC supply fall of 150 kb/d in August was driven by the North Sea and USA, where production was off by a combined 330 kb/d. Norweigan and Alaskan summer maintenance accounted for the bulk of this decline...

..August data for Russia showed oil production reaching 9.35 mb/d, 45 kb/d up on July....

..OPEC (ed: this includes Iraq) crude supply for August averaged 29.3 mb/d, up by 410 kb/d to July....

...OPEC-10 (excluding Iraq)....spare capacity continues to erode to very low levels, at least when measured on a sustainable basis. However a combination of surge capacity and expected capacity additions (ed: don't know if these will materialize!) by end-year mean that short-term flexibility may be 1.9 mb/d more than suggested purely in terms of sustainable capacity.

page 14: (regarding OPEC estimate of sustainable capacity):Key in this regard is Saudi Arabia's reported capability to reach 10.5 mb/d, compared to this Report's assessment of 9.5 mb/d sustainable capacity (attainable within 30 days and immediately sustainable for 90 days or more)

Page 17: Mexico - July actual. Crude oil production fell by more than 70 kb/d in July to 3.8 mb/d, and once again heavy crude accounted for the bulk of this. NGL production was also 15 kb/d lower at some 445 kb/d. Exports too were down by 40 kb/d at 1.81 mb/d as heavy/sour Maya deliveries, and notably those into US and other American markets, fell...(despite recent claimed reserve additions)...the future ability of Mexico to exploit deepwater reserves to offset declining Cantarell field output remain in doubt. [ed: Canterell is dying?]

Ok, I stopped at page 18. Would someone else like to take a crack at it?
Guest
 

Unread postby Guest » Thu 23 Sep 2004, 22:57:37

I'll also note that IEA's reckoning of SA's current sustainable production capacity of 9.5 mb/d is also SA's August production number (9.5 mb/d).....and from other reports we find that most of that recent increase was likely heavy oil...

Not to alarm anyone, and this was noted in this forum recently, but it bears repeating: in other words, Saudi Arabia is pumping at full capacity!!! (excluding the possibility of later capacity additions and surge addition... but I am wary of those who say that "it would/will be higher if only the proper investments are/were made"....Remember, too, how OPEC recently tried to trumpet that 1.0-1.5 spare capacity figure...the IEA said basically: "Nope." No serious analyst I've read recently believes OPEC anymore anyway...

The myth of endless, vast SA oil seems to be officially over. Also keep in mind this is not Collin Campbell, this is not Matt Simmons, this is the IEA saying this.

Don't expect to see any big headlines on this, though. The shock waves would be truly enormous...consider yourself now part of the "in" crowd on this...

The powers that be already knew and began preparations....now are you?
Guest
 

Unread postby Guest » Fri 24 Sep 2004, 02:27:24

For those so inclined, go to page 26 of this report, and
see the chart entitled: "Curde Inventories and Prices, Shifting Patterns".
It details the unusual non-linear break from the usually highly linear correlated relationship between WTI crude oil prices and US industry crude oil stock levels.

I'd like to see what conclusions others draw from the chart...For me, it's clear that oil is trading on an "other" variable....and something fundamental has shifted, peak oil, probably.

I'd post the chart here if I could figure out how.

Maybe someone could?
Guest
 

Unread postby Soft_Landing » Fri 24 Sep 2004, 10:46:08

Maybe someone could?

Image

This report is a few weeks old.

Notice the most recent numbers?

U.S. crude-oil stockpiles fell 9.1 million barrels to 269.5 million in the week ended Sept. 17, the U.S. Energy Department said. Supplies are 5.8 million barrels from being the lowest since September 1975. It was the first time since 1988 that inventories had dropped for eight straight weeks.
Bloomberg

So the lastest point on the scatter would be way up in the left hand corner.

The breakdown of this correlation is probably what most analysts are referring to as the terror premium. I prefer to think of the so called 'terror premium' as really a 'lack of surplus capacity' premium. Terror or no terror, low spare capacity is going to add to price.

I think the spare capacity is an interesting variable, because it would be impossible to be in decline without having zero spare capacity. Seeing spare capacity go down, and prices subsequently edge upward, these are things that must preceed peak. Of course, it's theoretically possible to rebuild spare capacity, but the trend is down there. That's thanks to the US going into Iraq in part. Would they like to lose more spare capacity (nb. understatment) by going into Iran?
User avatar
Soft_Landing
Heavy Crude
Heavy Crude
 
Posts: 368
Joined: Fri 28 May 2004, 02:00:00

Unread postby Guest » Fri 24 Sep 2004, 11:20:16

Thanks for posting that chart....

The breakdown of this correlation is probably what most analysts are referring to as the terror premium. I prefer to think of the so called 'terror premium' as really a 'lack of surplus capacity' premium. Terror or no terror, low spare capacity is going to add to price.

I think the spare capacity is an interesting variable, because it would be impossible to be in decline without having zero spare capacity. Seeing spare capacity go down, and prices subsequently edge upward, these are things that must preceed peak. Of course, it's theoretically possible to rebuild spare capacity, but the trend is down there. That's thanks to the US going into Iraq in part. Would they like to lose more spare capacity (nb. understatment) by going into Iran?



Since, as you say, in order for us to be at peak, space capacity must go to zero....

That would lead naturally lead to make another kind of chart...

Charting spare capacity....vs. prices.. (over time..like the chart above to determine linear relationship


Maybe the chart's available somewhere...or we could make it...

We could we get the data?
Guest
 

Unread postby Barbara » Fri 24 Sep 2004, 12:14:29

OK, this is my stupid thought.
Saudis reserves are unknown until now, but if we agree they are at peak then we just look at how much they've already pumped in the whole history and voilà, we know exactly how much is left.
Am I wrong?
Please respond! ;)
**no english mothertongue**
--------
Objects in the rear view mirror
are closer than they appear.
Barbara
Light Sweet Crude
Light Sweet Crude
 
Posts: 1121
Joined: Wed 26 May 2004, 02:00:00
Location: Zoorope

Unread postby pip » Fri 24 Sep 2004, 13:38:33

I'd like to see a spare capacity chart over several years. Maybe lack of spare capacity is normal and that is the way the industry works. I doubt it, but this is my first peak oil scare. Just trying to get some perspective.
User avatar
pip
Heavy Crude
Heavy Crude
 
Posts: 480
Joined: Wed 21 Apr 2004, 02:00:00
Location: Republic of Texas

Unread postby Soft_Landing » Fri 24 Sep 2004, 15:16:32

That would lead naturally lead to make another kind of chart...

Charting spare capacity....vs. prices.. (over time..like the chart above to determine linear relationship


Maybe the chart's available somewhere...or we could make it...

We could we get the data?


This is trickier than it sounds. The relationship plotted can be meaningfully because price and US stocks are pretty much known quantities on a weekly basis. As far as spare capacity is concerned, well, it's an estimation based upon state secrets. In any case, that estimation doesn't change on a weekly basis, but is probably more relevant on a yearly scale. Price and stocks obviously change a lot over the course of a year.

If trading was changing based upon spare capacity, what you might expect is something like this:

Image

In this model, there is a different relationship between stocks and price for each given spare capacity regime (indicated by the green lines).

Although we can see at once that this kind of idea isn't going to work in any simple way. After all, we know that in 2003, there wasn't a great deal of spare capacity (this is right, isn't it?) and yet, in 2003 (red squares), we can see the price vs stocks points seem to be on the same stocks X price curve. What we do notice, though, is that all the 2003 data points are on the left of the scatter, indicating that stocks were on the low side historically for the entire year. Given what we know about US refining capacity, this is probably just explained by an unexpected increase in demand.

Of course, this is a problem for the 'spare capacity as a variable' model. The way you'd want to alter it, in my opinion, is factor in an expectation of future spare capacity, or something like that. When you have a relationship like this, i believe it tends to get well known among traders in the commodity. Regular traders are likely to decide when to buy based upon curve in relation to the typical variables. This makes the old model something of a self fulfilling prophesy. It takes a while for the traders to start acknowledging new information.

One reason spare capacity is interesting in a model is because it eliminates downside risk for speculators. If there is little spare capacity, then price can hardly come down too much - there'd be no more product for the market to sell. Thus, the lower speculator's (i'm taking long term here) believe spare capacity is, the more that oil becomes a safehaven of sorts. That was my reasoning behind proposing spare capacity as a variable.

But if spare capacity is going to work this way, then that means the speculators first have to believe that spare capacity is low, and that it's not going up any time soon.

Now, if you look back at the graph, you can see that the 2004 datapoints seem to cover a range between the mainstream correlation, and a second accumulation that is off the main curve (circled region). If you were to use your imagination, you could imagine traders figuring out that spare capacity was low near the beginning of 2004, and as a new trend forms, data points drift right toward the new accumulation.

This could be tested if we had dates for each of those 2004 data points. They're probably on the IEA website or somewhere. I'll see if I can find them and post the results...

I've just realised one other thing worth mentioning... The vertical axis is dollars in nominal terms, as far as I can see. If inventories have changed significantly since 1993 toward more of a just in time schedule, then you'd expect inventories to get smaller as price goes up (ie time). Make sense? This just suggests an artifact that could contribute to the appearance of the curve. Ideally, the vertical axis should really be in constant dollars.
User avatar
Soft_Landing
Heavy Crude
Heavy Crude
 
Posts: 368
Joined: Fri 28 May 2004, 02:00:00

Unread postby Soft_Landing » Fri 24 Sep 2004, 15:57:50

Pip wrote:I'd like to see a spare capacity chart over several years. Maybe lack of spare capacity is normal and that is the way the industry works. I doubt it, but this is my first peak oil scare. Just trying to get some perspective.


Image

As you can see, price and spare capacity appear to operate inversely only after 1990. Before that, there's too much spare capacity to worry about. The trick is that this capacity is being controlled by OPEC, so it doesn't really count I guess. Except it does count to disuade speculators. If the price is speculated upward, OPEC can just release more stocks...

That makes sense. You cant make money speculating whilstever OPEC can bring the price down. Thus, spare capacity should be fairly much irrelevant whilstever OPEC has respect. The media has pretty much taken OPEC apart over the last few months, admitting that OPEC can't bring down prices. Wouldn't that be the crucial variable relating spare capacity and (price x stocks)?
User avatar
Soft_Landing
Heavy Crude
Heavy Crude
 
Posts: 368
Joined: Fri 28 May 2004, 02:00:00

Unread postby Guest » Fri 24 Sep 2004, 17:00:14

SL,

Outstanding finds and analyses...thank you...I'll add more thoughts when I have time...

But I might add quickly that as we try to factor in space capacity as a variable, that it is possible that even if space capacity is zero, we may not be at peak. In other words, production is flat out (supply and demand in balance, or demand greater than supply), but still to rise.

Mathematically: peak is conditional upon spare capacity=0?
but spare capacity=0 not conditional upon peak?

Arrgh...where's my textbooks...

The new model we are proposing could be very useful.....even pre and post peak, when one considers demand destruction (intentional or otherwise) to intentionally alleviate or increase spare production capacity due to peak production contraints...would act as the limiting cap and provide a rough guide...
Guest
 

Unread postby Griztown » Fri 24 Sep 2004, 17:48:03

It seems hard to believe we are at the Peak now considering Iraq hasn't been developed and Russia is still increasing their output. Imagine if Iraq stablized (unlikely I know) and Yukos came out of bankruptcy (spelling?) wouldn't spare capacity jump back up again? Based on the previous chart, spare capacity jumped up again in 2001, why was that?
Griztown
 

Unread postby lotrfan55345 » Fri 24 Sep 2004, 19:47:32

Griztown wrote:Russia is still increasing their output.


They've already peaked.... This second, more smaller peak is due to more tech after the crash.
lotrfan55345
Light Sweet Crude
Light Sweet Crude
 
Posts: 1092
Joined: Tue 20 Jul 2004, 02:00:00
Location: Minneapolis / Pittsburgh

Unread postby nero » Sat 25 Sep 2004, 01:27:38

Based on the previous chart, spare capacity jumped up again in 2001, why was that?


The Bubble bursting and recession in US caused that increase in spare capacity.
User avatar
nero
Light Sweet Crude
Light Sweet Crude
 
Posts: 1433
Joined: Sat 22 May 2004, 02:00:00
Location: Ottawa, Ontario

Unread postby small_steps » Sat 25 Sep 2004, 07:30:36

nero wrote:
Based on the previous chart, spare capacity jumped up again in 2001, why was that?


The Bubble bursting and recession in US caused that increase in spare capacity.


Really? Does the actual consumption numbers back this statement up?
Go to :
http://tonto.eia.doe.gov/oog/ftparea/wo ... /psw10.xls

and plot column 'H', what do we see, a slow steady rise in consumption, no real drop, possibly may have been one worldwide, though.

Graphing the weekly and monthly data can provide some very interesting insights, how the hell do you posts images (Soft_Landing - can you help?)
small_steps
Heavy Crude
Heavy Crude
 
Posts: 258
Joined: Sat 03 Jul 2004, 02:00:00

Unread postby Soft_Landing » Sat 25 Sep 2004, 09:21:55

Nero wrote:The Bubble bursting and recession in US caused that increase in spare capacity.


Yeah, I've always assumed this explanation was correct.

small_steps wrote:Really? Does the actual consumption numbers back this statement up?


This is world consumption 1995-2003 as per BP report.

Image

It appears that world consumption is about 1mb/d below the trend set throughout the late 90's. So, it doesn't seem as though the entire increase in surplus capacity around 2001 was the result of consumption loss. But say new surplus capacity totaled 2.5 mb/d, then we are faced with the possibility of a 1.5mb/d natural increase in new production combined with a 1mb/d decline in demand.

Now, these figures are from different sources, which is always dangerous. The consumption is from BP 2004 and the spare capacity is from wrtg economics. It is possible that these different sources are making different inclusions or have other sources of error.

At the end of the day, spare capacity is a really problematic measure. There's no way to get an objective reporting. How do you really know what the spare capacity is? The number reported is probably just the analysts best guess. So i'd take spare capacity data with a grain of salt... and allow for at least 1mb/d up or down on the reported value.

Anyone know about new projects that came on in 2001? That would have been a big year for deepwater, right?
User avatar
Soft_Landing
Heavy Crude
Heavy Crude
 
Posts: 368
Joined: Fri 28 May 2004, 02:00:00

Unread postby Soft_Landing » Sun 26 Sep 2004, 14:55:03

But I might add quickly that as we try to factor in space capacity as a variable, that it is possible that even if space capacity is zero, we may not be at peak. In other words, production is flat out (supply and demand in balance, or demand greater than supply), but still to rise.

Mathematically: peak is conditional upon spare capacity=0?
but spare capacity=0 not conditional upon peak?


Yeah, this is fine. The majority view is that the shortness of spare capacity is just a temporary thing, and will soon go back up. Even if spare capacity hit zero, it doesn't have to be peak. Kinda makes it worth watching though.

I wrote:This could be tested if we had dates for each of those 2004 data points. They're probably on the IEA website or somewhere. I'll see if I can find them and post the results...


Image

The arrow shows the strange direction the data points travel along during the period Feb to May. Since then, they appear to have sat in a new parallel trend perhaps.

Just trying to step back a bit, there's no intrinsic reason why US stocks should be related to oil price, except the change in unmet demand as indicated by US stock rises and falls. To clarify, imagine you went to the store to buy apples. Some weeks you buy lots and some weeks you only buy a few. Imagine if the price of apples moved depending upon how many you bought! How would that work? Well, if you bought, say, 1/4 of all the apples in the world on average, of course that would happen. Your stock draw changes the whole equation with the price of apples. Well, so it has been with US demand for oil.

So what I'm saying is, that stable relationship might represent the fact that US oil demand has so consistently dominated world oil demand. If other players start to weigh in big time, that changes the equation, right? As China has had a large and unexpected rise in demand over the course of this year, it makes sense that the US stock v price curve would have shifted... It should persist until Chinese demand growth slows? Or until spare capacity is returned? I'm not sure...

The new model we are proposing could be very useful.....even pre and post peak, when one considers demand destruction (intentional or otherwise) to intentionally alleviate or increase spare production capacity due to peak production contraints...would act as the limiting cap and provide a rough guide...


Are you suggesting here that we might try to predict post peak price by looking at potential spare capacity. I hadn't actually thought of it like that. I would like to be able to model high oil price as a negative feedback cycle on economic production, but it seems a little more complicated than that. If you could do that, and if you could find a stable relation between spare capacity and price, then you could get an idea of how a cyclic depression might relate to oil price...

Unfortunately, this attempt would still have the underlying assumption of Business As Usual(BAU), which I really don't see applying in a post peak world. When debtors start defaulting, panics and stock market crashes show up, energy and food prices begin to rise solidly... I just don't think any of our current 'historical correlations' will be very trustworthy.

small_steps wrote:Graphing the weekly and monthly data can provide some very interesting insights, how the hell do you posts images

small_steps - this is OT, so i PMed you. check there.
User avatar
Soft_Landing
Heavy Crude
Heavy Crude
 
Posts: 368
Joined: Fri 28 May 2004, 02:00:00

Next

Return to Peak Oil Discussion

Who is online

Users browsing this forum: shortonoil and 21 guests