The Market And Energy Page, Part 2, T+210 -- August 18, 2017

Rick Weiss. Say what? A Harvard University study in 2012 called "it" just right:

Global oil supply capacity is growing at an unprecedented level, and could result in an overproduction glut and steep dip in oil prices, according to a June 2012 study from Harvard University's Kennedy School of Government.

Contrary to the idea among some that global oil supply is running out, additional production of 17.6 million barrels of oil per day (bopd) could come online by 2020, boosting global production capacity to 110.6 million bopd, even with depletion rates for currently producing oilfields and reserve growth.

"This would represent the most significant increase in any decade since the 1980s," said Leonardo Maugeri, author of the study "Oil: The Next Revolution -- The Unprecedented Upsurge of Oil Production Capacity and What It Means for the World."

Field-by-field analysis of global oil exploration and production projects suggests unrestricted, additional production of over 49 million bopd of crude oil and natural gas liquids could come online in 2020, the equivalent of over half the current world production capacity of 93 million bopd.

In the comment section, Rick Weiss:

One should be aware of possible incompetence in the report. Crucial errors were summarized in David Strahan’s blog (http://www.davidstrahan.com/blog/?p=1576) as follows (quoted from that blog). Plenty of ink has already been spilled by oil depletion experts exposing some of the wildly optimistic assumptions contained in Maugeri’s report. More damning is that the work is shot through with crass mistakes that render its forecast worthless.  

But this is what caught my ire/attention:

Maugeri claims this looming glut has three legs: booming upstream investment by the oil industry; the rise and rise of unconventional production such as US shale oil; and a tendency among forecasters to over-estimate massively the rate at which production from existing oil fields declines. The first point is uncontroversial, the second is moot, but the third is the most important; without it, Maugeri’s glut evaporates. 

Second leg: the rise and rise of unconventional production such as US shale oil, which Rick Weiss called "moot." LOL. 

Rick's bottom line: " ... wildly optimistic assumptions contained in Maugeri’s report. More damning is that the work is shot through with crass mistakes that render its forecast worthless."

Must have been advising Goldman Sachs lately.

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Oil Demand Peak? Peak Oil Supply?

From Rigzone, a great article for the archives:

The oil industry is quite familiar with the concept of a “Peak Oil Supply” but people find it hard to believe that there is another side of the theory, which is “Peak Oil Demand”. This article will examine why the concept of peak oil supply failed to materialize and why one should believe the concept of peak oil demand will materialize.

Archived.