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Page added on March 22, 2019

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The EIA’s Optimistic Outlook

The EIA’s Optimistic Outlook thumbnail

Most of the data below is taken from from the EIA’s Short-Term Energy Outlook. The data through February, 2019 is the EIA’s best estimate of past production and all data from March 2019 through December 2020 is the EIA’s best estimate of future production. However in most cases February production is highly speculative so I drew the “projection” line between January and February.

Understand the above chart is Total Liquids, not C+C as I usually post. As you can see the EIA expects world petroleum liquids to keep climbing ever upwards.

This is the EIA’s data for OPEC all liquids with Production data from April 2019 through December 2020.

Notice the EIA expects OPEC production to keep declining through December 2020. Also they expect total liquids to decline slightly faster than crude only. This is interesting since neither condensate nor other liquids are subject to OPEC quotas.

About two years ago I made note that the EIA expected Non-OPEC to plateau but they expected OPEC to keep increasing into the future. Now they have completely reversed themselves as they expect all future growth, at least for the next two years, to come from Non-OPEC countries.

The below  chart is from the EIA’a Monthly Energy review and is C+C through November 2018.

Virtually all crude oil increase since 2016 has come from three countries, USA, Russia and Canada. The spike upward (circled) in October and November 2018 was partially due to OPEC prepping for cuts. Every OPEC country made heroic efforts to increase productio during those two months in order to increase their quota. Quotas were set in December.

Nevertheless OPEC production during these two months was still over one million barrels per day below their record set in November of 2016.

Okay, back to the EIA’s Short-Term Energy Outlook of total liquids.

Here is what the EIA expects Non-OPEC liquids to do.

And most, but not all, they expect the growth in total liquids to come from just these three countries.

Even though Non-OPEC less US, Russia and Canada has been trending down, the EIA expcets a complete turnaround in that trend.

They expect about 1.2 million barrels per day of that future increase to come from five other countries, Brazil, Norway, Oman, Qatar, and Australia.The annual gyrations seen in this chart is due to Brazil’s ethanol production. It peaks in mid summer and bottoms out in mid winter.

But finally we have reached the limits of the EIA’s optimism. After the USA, Russia, Canada and the five nations listed above, they only expect the rest on Non-OPEC to slightly slow their decline rate.

The bottom line: In the next decade or so, there will be countries that increase their oil production and there will be countries that will have a decrease in oil production. Peak oil will occur, or did occur, when the amount of oil from increasing countries cannot overcome the decrease in oil production from declining countries.

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One Comment on "The EIA’s Optimistic Outlook"

  1. Robert Inget on Sat, 23rd Mar 2019 11:18 am 

    Three important factors;
    DemanDemandDemand

    In EVERY instance unless the world decreases demand, there’s no way there will be equity.

    Two examples:

    Ford Motor just put on a second shifts producing
    best selling SUV’s and Pick-Up-Trucks.

    Single use plastics now competes w/ transportation consumption.

    The oil industry is dancing as fast as they can considering $50 oil is in most cases, below cost of production.
    Considering shale, tight/oil isn’t really oil but mainly condensate.
    In order to satisfy investors most oil companies have stopped looking for replacement crude.

    Like Brits who had No Plan for Brexit, oil companies are now only gingerly looking at alternatives. (too little, too late?)

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