Thursday, June 10, 2010

The Statistical Review of World Energy

BP just released the BP Statistical Review of World Energy, which is published annually, and covers consumption, production and other statistics on oil, natural gas and other forms of energy for 2009.

I just wanted to point out the statistics on domestic United States production of oil and natural gas.

Natural gas production moved up as everyone expected due to the large scale development of unconventional resource basins. United States natural gas production increased by 3.5% in 2009, the fourth consecutive year that production has moved higher.

A bigger surprise was on the oil side, as production in the United States increased by 460,000 barrels per day, a 7% increase and the largest since the early 1970’s.

It would be premature to read too much into this number, as a one year increase in production coming after a generation of declining numbers, might be a statistical blip. Also, the deepwater moratorium on drilling will impact domestic oil production going forward.

It is something for investors to watch, however, since the 2009 numbers don’t reflect the shift in capital away from natural gas and towards oil development that has gained momentum recently.

Here is a link to the full report.

7 comments:

Anonymous said...

Oil demand/prices over the next decade will to a large degree be driven by emerging economy demand at the margin. Here is a simple thought experiment using Chinese demand to generate some rough “back of the envelope” forecasts:
- China moves from 3 bbls/person/year to the South Korean per capita consumption level of 17 bbls/person/year over the next 30 years
- No peak in global production

Result: In next 10 years we must find 44 million BOPD - 26 million BOPD to maintain supply and 18 million BOPD to keep up with demand increases.

If you superimpose peak production on top of this demand profile using the following parameters oil prices would increase approximately 250% in real terms over next 10 years – most likely something would give far before that price level:
- Oil demand elasticity of -0.3
- Current production 84 million BOPD, current price US$ 80
- Peak production 100 million BOPD
- Post peak decline rate of 3-4%

If you want to try the china oil demand or the peak oil models for yourself using your own assumptions they can be found at Enquirica in the “Research” section: http://www.enquirica.com/index.php?option=com_content&view=article&id=11&Itemid=13

Anonymous said...

Nice sight needs updating though, PDE is a buy when oil comes back = value play here. take care

Trading Stock Market said...

Energy was always a major factor in economy developing. As long as we have rapidly growing economy in Asian countries the demand on gas and oil should be increasing.

Market Volume said...

I think the Oil trend greatly depends on the US currency trend, the same as US currency trend depends on Oil price. As long as the US dollar is the main currency used to trade oil it could be that way.

Options Trader said...

We should always keep in mind that energy supplies on earth are limited. With growing economical demand on oil it could be one of the most stable investment vehicle over the next decade.

David Wilson said...

Thanks for the post, great info as always.

Adam Keeling said...

I agree will some of the points made, but there are a whole host of additional factors affecting oil prices. For more on some of these, see this article to get more detail on oil pricing:

http://mainstinvesting.blogspot.com/2012/03/who-are-oil-speculators.html