World Oil Production Approaches 2008 Peak
Oil prices in the $80 per barrel range are spurring increased oil production. Shockingly, most of the increase is coming from non-OPEC sources -- the area of oil production that is supposed to have already peaked!
The peak of monthly production was in July 2008. The trough in the depths of the global recession depends on which series one looks at, but I have been examining the recovery from May 2009 onward. And at this point, the latest figures show us about 1.3mbd to 1.4mbd (mbd = millions of barrels/day) away from reaching the July 2008 peak again.
A few days back, I analyzed the composition of the recovery from May 2009 to the most recent figures (based on IEA OMR data). That showed the recovery coming from a variety of countries, but with two-thirds of it coming from non-OPEC countries, and only about 0.7mbd coming from OPEC:
As predicted by Al Fin recently, Russian oil production is rising. Iraq's government is still trying to stabilise the country so as to maximise oil production. If they are successful, Iraqi oil could push back "peak oil" by 10 years.
As oil prices strain to break out into the $90 a barrel range, many analysts are wondering how high the price of oil can rise -- this time around the bubble machine. Should oil speculation and the US Fed's loose money policy allow oil prices to go much higher, a catastrophic demand destruction could once again set in, to bring the world's economy to another halting crash.
The question is whether OPEC could halt runaway speculative oil pricing by increasing OPEC oil production? OPEC is holding back at least 2.5 mbpd of unused capacity. But it is likelier that OPEC is holding back considerably more -- not counting Iraq's latent production capacity. It may be a matter of upgrading production facilities, or implementing new oil well technologies that have boosted mainland US oil production recently.
Whether there truly are 10 trillion barrels of reserve oil waiting to be found and produced, or whether the number is only half that, we are not likely to see any kind of peak oil except for "political peak oil." The kind of peak oil that comes from bad government policy -- such as the Obama Pelosi energy starvation regimen.