Global Fossil Fuel Production And Consumption -- 2022 Statistical Report

Locator: 45452OIL.

Updates

August 23, 2023: global oil consumption nears all-time highs. Robert Rapier over at oilprice.

Original Post

Is anyone doing the math? This has been going on for quite some time. Link here.

• global oil production (liquids to include lease condensate and NGLs)
• 2022: 93.8 billion bpd (just sort of the 2019 record)
• 2021: 90 million bopd
• 2019: 94.8 million bod (all-time high)

• global oil consumption:
• 2022: 97.3 million bpd
• 2021: 94.2 million bpd
• 2019: ~ 99.8 million bpd (all-time high)

• Global producers:
• oil production: US took the lead in 2014 and has led every year since then but one
• 2022: US oil production just 3.5% short of all-time record set in 2019; 
• on pace to set new production record this year [despite E&Ps cutting back on CAPEX and drilling]
• the US enjoys a lead over both Saudi Arabia and Russia but not be much, only a million bpd
• but when you include NGLs, then the spread is amazing
• 2022:
• US: 17.8 million bpd
• Saudi Arabia: 12.2 million bpd
• Russia: 11.2 million bpd

• Global top ten consumers:
• Germany dropped out of the top-10 list
• Mexico joined the list at #10
  

The SPR Meme -- July 18, 2023

Locator: 45152SPR.

SPR: much ado about nothing.

• wow, not only a "nothing-burger" but incredibly irrelevant.
• consider the source;

This has been discussed before but not in depth.

The SPR issue -- OMG -- it took decades to fill, the Biden administration drained it in days and now it will take decades to fill.

To be continued.

************************
Data Points

Demand:

• US crude oil demand: max to date -- about 21 million bopd -- and that's on a good day.
  
• US crude oil demand, lowest point during Covid-19 lock down, link here:
• approximately 14 million bopd, January - March, 2021; 
• if that's the average, maybe down to as much as 13 million bopd

US crude oil production:

• 13 million bopd

US crude oil in storage:

• crude oil in the SPR in 1H2023: 350 million bbls.
• crude oil in commercial storage in 1H2023: 460 million bbls; link here.

Narrative: 

• during Covid-19, which was a voluntary lock down for the most part, demand dropped to less than 14 million bopd
• US production under a "unhelpful" administration and with WTI unable to sustain a price greater than $75 is producing about 13 million bopd
• at worse, just using those two data points, the net delta for oil demand / oil supply: a shortage of one million bopd
• commercial crude oil: 460 days
• SPR: 350 days
• total: 810 days

US crude oil production with a helpful administration, $100-oil, and/or a geo-political emergency:

• minimum: 16 million bopd; link here.
• my hunch: max production could trend toward 20 million bopd within 365 days under "max-case" scenario.

So, where's the choke point?

• upstream
• midstream
• downstream (out-the-door)
• downstream (last mile)

Other comments

• some say selling oil from the SPR was done for financial reasons (deficit, debt, budget imbalance, additional Congressional spending, whatever)
• this is the story as being reported by Reuters, June 30, 2023, link here
• US to buy 3.2 million bbls of oil from four companies to continue refilling the SPR
• bought at an average price of $72 / bbl
• originally sold at $95 / bbl
• paper profit: $23 / bbl = $74 million
• fiscal year spend, 2023: $4.81 trillion
• = 13,178,082,192 = $13 billion / day
• $74 million / $13 billion = 0.0569 = 5.75% on a daily basis.
• the entire SPR at a $25 / bbl paper profit: $8.75 billion
• the entire SPR at a $25 / bbl paper profit = $8.75 billion = 1.8% of the total US budget

At one time I might have argued the same point. If I did, I was wrong.

The real reason to release crude oil from the SPRR was a political decision as noted by Reuters and had nothing do with the deficit. The funny thing: American CPAs are calculating the paper loss and profit. The average American doesn't care.

The average American cares not what the US deficit and no one knows what the true US deficit is at any one moment in time. But sixty percent of Americans know what they pay for gasoline on any given day.

To recap:

• way more oil in storage than we need; SPR is irrelevant (don't take that out of context)
• releasing oil from thhe SPR was a political decision to warn OPEC about the cartel's attempt to raise oil prices (and hence gasoline prices just before the mid-term elections)

But there's more.

Am I being too sanguine?

No, the "new" SPR is shale, the unconventional oil.

To be continued.

Global Oil: Production And Demand -- July 13, 2023

Locator: 45124OIL

Production. Link here. 80 million bopd.

Demand. Link here. 100 million bopd.

The Oil 2023 medium-term market report forecasts that based on current government policies and market trends, global oil demand will rise by 6% between 2022 and 2028 to reach 105.7 million barrels per day (mb/d) – supported by robust demand from the petrochemical and aviation sectors.

Despite this cumulative increase, annual demand growth is expected to shrivel from 2.4 mb/d this year to just 0.4 mb/d in 2028, putting a peak in demand in sight.

In particular, the use of oil for transport fuels is set to go into decline after 2026 as the expansion of electric vehicles, the growth of biofuels and improving fuel economy reduce consumption.

This Is Pathetic -- On A Good Day For Oil -- Oh, Never Mind -- It's Worse Than I Thought -- And I'm An Optimist -- LOL -- June 26, 2023

Locator: 45065WTI. 

The Energy Institute Statistical Review of World Energy, 2022, has just been released.

So, after all this data was released,

• solar and wind ddn’t dent fossil fuels,
• global economy is ready to surge post-Covid, 
• Saudi Arabia cuts production, 
• Russia almost stages a coup, 
• and .... and .... and ... and ..

What did WTI do today?

• can't break $70
• surges ... by 19 cents -- disregard -- that was pre-market ---
  
• up ... by 0.27% -- disregard -- that was pre-market ---

Now that the market has opened,

• didn't break $70
• drops half-a-percent
• trading below $69
• looks like WTI will close slightly up but below $70
• and this is on a "good news" day for oil.

And the lead story over at Oilprice.com: Saudi Arabia could slash oil supply to the US.

OMG.

Seriously.

That's the headline. That's the top story. Slash. Pretty scary word.

OMG.

On that news, WTI drops half-a-percent. And the huge July 4th this weekend -- and a long weekend -- five days -- people will start leaving Friday -- Monday is the "who cares -- tomorrow is the holiday -- I will just call in sick" day -- five days ... 

Does anyone pay attention to data any more?

Saudi Arabia oil to US -- historical -- link here. 

Remember, Saudi has a huge refinery in the US -- unless they want to buy Permian oil for that refinery, they can't "slash" much.

I guess it depends on the definition of "slash."

Oh, here we go ... WTI is starting to move ... up 15 cents .... trading at $69.31.

Good luck to all. I'm going biking.

On A Great Day For Oil -- WTI Surges -- Up 19 Cents -- Can't Break $70 -- June 26, 2023

Locator: 45064WTI.

The Energy Institute Statistical Review of World Energy, 2022, has just been released.

So, after all this data was released, solar and wind don't dent fossil fuels and global economy is ready to surge post-Covid, and Saudi Arabia cuts production, and Russia almost stages a coup, and .... and .... and ... and ..

What did WTI do today:

• can't break $70
• surges ... by 19 cents
• up ... by 0.27%
• and this is on a "good news" day for oil.

The real stories.

Bloomberg leads with this today:

Global electrical generation by fuel, link here:

European electrical generation by fuel, link here:

Global energy consumption, link here (at the link, the screenshot only shows through 2013; click on the graphs to go out to 2022):

Renewables growth did not dent fossil fuel dominance in 2022, link here:

Oil and the Russian coup, link here:

Saudis "tightening" the screws on America, link here:

Saudi in deep doo-doo, link here:

Wind energy: read the small print. Link to Bloomberg. How charts confuse folks.

How Close Are We To Peak Oil Demand? Alex Kimani -- June 5, 2022

I generally appreciate what Alex Kimani has to say but the conclusions he draws are ludicrous and worse, he presents no time line in his most recent essay.

Link here.

The question: how close are we to peak oil demand? 

The answer was never provided. It never is. 

The question is not "how close are we to peak oil demand" but whether there will ever be a supply / demand imbalance that will scare the crap out of the Germans?

**************************
Exhibit A

China signs yet another deal to buy 0.7 million tons of LNG from Energy Transfer's proposed Lake Charles export plant for twenty-five years. 

Roughly nine (!!) LNG supply deals between the US and China were inked last year.

Link here.

Everything else is white noise. 

**************************
Sunday Night Futures

Oil:

• Brent: $120.30.
• WTI: $119.50 (but it has been as high as $120.30 this evening).
• the spread is less than a dollar.
  

I'm lovin' it.

When It Comes To Oil, The Most Important Metric -- And It Just Got Interesting -- June 3, 2022

Weekly US days of supply of crude oil excluding SPR (and, oh by the way, President Biden is depleting the SPR). Link here.

Finally, after months of watching this metric, the US days of supply of crude oil dropped below 26 days. 

For the week ending May 27, 2022, the Friday before Memorial Day weekend, the US days of supply of crude oil dropped below 26 days. In case you missed it the first time.

I could be mistaken but I believe the last time this number was below 26 days was January 17, 2020, just a couple of months before the global lock down which began in March, 2020. 

Wow, Wow, Wow! Am I Good Or What! LOL -- April 6, 2022

Earlier today, at 9:44 a.m. CT, I posted, before the numbers were posted / before I saw them I wrote:

Number I'm waiting for: amount of crude oil in store measured in days. Report will be released today. 

• recent high: 41 days back in early March, 2022;
• trending down the last few weeks after relative "stability"
• last report, one week ago, at 26.1 days of crude oil in storage (US supplies)
• my estimate for new number: 26.0 days 

So, what is the number?

Right on the dot. LOL.

Inflation Coming In At 7.9%. Now This. This Is What Really, Really Scares Jay Powell -- March 22, 2022

Gasoline prices surging.

The very same day this data was released was the day Jay Powell, "Fed chairman," implied the Fed would raise overnight rates more than expected, faster than expected.

I've maintained ever since beginning the blog, the best indicator of the US economy was gasoline demand. And by that metric, the US economy is on fire.

Compare gasoline / diesel demand in:

• Russia
• Europe
• Britain

This has to be terrorizing the Fed: US sees highest gasoline demand since at least 2017.

This is despite:

• massive EV penetration (needs to be fact-checked but that's what "everyone" says)
• CAFE standards that in some cases border on the absurd
• at least five oil-price shocks in recent history that supposedly resulted in demand destruction

Did we mention that gasoline prices are surging with $120 oil? 

Demand destruction? What demand destruction?

The bigger concern is supply destruction (see earlier post).

But I digress.

I'm sure I must be misinterpreting the headline story. 

Back to the things that put terror into the hearts of "Fed" members: US sees highest gasoline demand since at least 2017.

Greta's head is exploding.  

More and more, the story is not "demand destruction," but "supply destruction."

Link to Tsvetana Paraskova.

• U.S. gasoline demand on Sunday jumped by 12.6 percent compared to the previous Sunday.
• U.S. gasoline prices fell slightly last week from the highs on March 11. 

Not one percent or two percent or even five percent or ten percent, but almost 13 percent. 

Trivia: the number page on the blog when one searches "demand destruction" was posted Saturday, April 23, 2011. 

From wikipedia:

Demand destruction is an economic term used to describe a permanent downward shift in the demand curve in the direction of lower demand of a commodity such as energy products, induced by a prolonged period of high prices or constrained supply.

So, if US sees highest gasoline demand since at least 2017, does that change all those arguments about "demand destruction"? 

Is this sort of like Hubbert's "peak oil theory" which has been clearly disproved?

********************************
Finally, Summer

Prognostications -- January 13, 2022

Today: EIA forecasts crude oil prices will fall in 2022 and 2023. 

Yesterday:

For all that talk of $100-oil and shortage of oil this summer, I just don't see it. Most credible analysts suggest the price of oil is currently at its peak and will gradually drop back to the $70 - $80 range in the near term, and back to $70 - $75 in the longer term (2023).

Link to Irina Slav, by this summer, the US will producing almost 2 million bopd more than needed:

From the EIA:

From an earlier post: 

*****************************
Take On Me

Take On Me, A-Ha

Spare Capacity Vs Inadequate Supply To Meet Demand -- Call It Whatever You Want -- January 3, 2022

Link here.

Making Carrot Cake:

Weekly US Days Of Supply Of Crude Oil Excluding SPR -- December 30, 2021

Link here. 

26.7 days. 

Not trivial.

Global Crude Oil Supply And Demand -- October 31, 2021

Link here.

In the graphic below:

• the double bars are quarterly; most recent is 3Q21;
• the bars are "supply" --
• the darker grey/blue bars: EIA estimate
• the lighter blue bars: OPEC estimate
• the lines are demand --
• the red line is demand, EIA estimate
• the blue line is demand, OPEC estimate
• comments:
• prior to CY19: supply/demand pretty much balanced
• huge production overhang when demand plummeted first quarter - second quarter, 2020
• for the past five quarters, demand has exceeded supply and the gap is fairly consistent
• a reminder: the price of the last bbl of oil determines the price of oil

Investopedia: note the date of this article and the authors' comment about OPEC's price target.

Crude Oil -- Peak Demand, Peak Supply -- Which Comes First? -- Morgan Stanley Says Peak Supply -- Result: Significantly Higher Crude Oil Prices Sooner Than Later -- October 20, 2021

Generally, with regard to ZeroHedge, I can take it or leave it. But this particular article, linked here, sent to me by a reader, is a "keeper," and a must-read. I'm not going to cut / paste any excerpt. If interested, one will have to go to the link at ZeroHedge. I have archived it. If the link breaks or the article disappears let me know and I will forward you what I can. 

I read the article very, very quickly. I probably missed a lot and probably misread a lot but bottom line, Morgan Stanly suggests global demand for energy (and percent of crude oil's contribution) will grow more quickly than forecast and current production trends suggest, in Morgan Stanley's estimation, that production will not keep with up with demand.

Short soundbite: peak demand will occur before peak supply. 

Two comments with regard to the article.

First.

The big unknown is exactly of what Saudi Arabia is capable. To what degree can OPEC+ / Saudi Arabia change the equation. Perhaps I should do a poll on this but it's my feeling that readers are pretty much divided:

• half of my readers would say that Saudi Arabia is sandbagging us, purposely under-producing, to drive prices higher;
• the other half would argue that Saudi Arabia may indeed be challenged with greater production to meet increased demand.

Regardless of the correct answer, which may not be known for years / decades, it is the great unknown in the peak demand / peak supply equation. 

Second.

I read the article quickly and I may have missed it but, although I saw China (and Asia) mentioned, I did not see India mentioned. India always seems to be left out of these discussions. 

Bottom line: the tea leaves suggest --

• most conservatively: crude oil will stay in the current trading range through the end of the year;
• increasing number of analysis: suggestions that crude oil will trend toward $95 by mid-2020 if not by the end of this year (2021)
• some options traders are willing to put some money on $200 oil by the end of 2022.

Having said that, some analysts suggest crude oil could drop to $40, and maybe lower. 

Be that as it may, the linked ZeroHedge article is a keeper.

How Did This Happen So Quickly? Seems Like Literally Overnight -- September 20, 2021

Updates

September 21, 2021: from a reader -- 

Because China is transitioning from their old dirty coal plants: ultra super critical technology all fitted with BACT (Best Available Control Technology) for emissions better than EU standards and equal to US. They can run the old plants as required. They are in good shape. It's a lot easier to import and mine more coal than it is to build new generating capacity. 

The fun stuff for the next few years will be watching Germany Not shut down the last of their nukes on schedule and increasing instead of decreasing their emissions burning lignite. 

Not to mention the UK having to decide if they want to start fracking for gas or getting a lateral line connection with Nord Stream 2. 

Lot's of fun just in time for COP 26! As you know they've been squabbling with Australia about importing.

China gave up on utility scale wind and solar August 1, 2021. I bet they wished they done it about five years sooner.

Original Post

Though a lot of folks will say they saw this coming. See first comment.

Link here. 

Or go direct to the Bloomberg article via Rigzone.

China is at risk of the same energy-crunch chaos seen in Europe, with a state-run newspaper warning that coal-fired power plants will struggle to keep the lights on this winter.

The nation’s coal-based power producers, which account for more than 70% of the country’s electricity generation, are unable to buy enough fuel after prices surged, state-run China Energy News said in a report dated September 18, 2021. 

Officials at those plants say they have little coal in inventories, and it’s “almost impossible to buy” the fuel right now, the paper said. Many are struggling with deep operation losses, and some have even turned off their boilers to save costs, the report said. 

Energy markets across the world are being rocked by soaring fuel prices, with power companies clambering to secure supplies of everything from coal to gas to fuel oil. Europe has borne the brunt of the crunch, though the U.S. hasn’t been spared either, with electricity prices for the winter soaring to a seven-year high. 

In China, the situation has been exacerbated by President Xi Jinping’s ambitious climate goals that discouraged dirty coal mining. A lack of power to supply the world’s second-biggest economy could throw millions of factories and households into chaos, especially when consumption for heating is about to increase during winter.

China’s power producers have such low inventories that some have even warned they only have about a week’s worth of coal left, the Chinese energy newspaper said, without identifying the officials or their plants. The paper, a mouthpiece of the state-run People’s Daily, used to be run by the National Energy Administration, the country’s top power regulator.

Chinese power generators are prioritizing procuring enough coal at the moment and are willing to pay whatever the freight costs, the newspaper said, citing an unnamed official at a plant in the Northeastern region. Traders from the factory were hunting for supplies across the country, only to find out rivals in the Southwestern province of Guizhou, a major coal producing region itself, were competing with them, the newspaper said.

Much more at the link. 

Global Oil Supply -- September 14, 2021

Hurricane Ida: GoM crude oil losses stand at 30 million bbls. But that pales in comparison to what Resident Biden has cost us.

I don't know what others think, but this seems .... well, unnerving.... with the economy opening up ... link here:

Observations:

• OPEC: disciplined?
• Russia: already at maximum production?
• Mexico: confused?
• Venezuela: rock bottom?
• China: booming?
• US: Resident Biden doing what he can to hold back US oil production!

WTI today: pretty much unchanged at $70.47

The Discussion Changed In Less Than One Month -- No Longer Supply Decline, But Rather Demand Surge -- June 20, 2021

An analyst much smarter than I nailed it: just because there is a growing supply of crude oil, it doesn't mean there won't be a shortage. It's all about demand and the "ability" of operators to keep up with that demand. 

It now appears that the US won't hit Biden's ridiculously low bar to have 70% of American immunized by July 4, 2021. Already, the president has pivoted: he now talks about the 150 million doses that have been administered. But that still leaves about 50% of Americans not fully vaccinated. Evenly split. 

But even with that, the US is re-opening very, very quickly. 

The rest of the world: it's estimated that about 3% of the rest of the world is fully vaccinated. Ouch. And I'm not talking about the literal jab. 

Some stories from overnight about the demand surge:

• from Bloomberg, empty oil tanks at key storage hub show speedy demand rebound; note the emphasis on demand, not supply;
• also from Bloomberg, Big Oil's new problem isn't lack of demand, it's lack of supply; yes, a different emphasis, but it still stems from the demand surge; either that or everyone is lying about OPEC's spare capacity;
• from S&P Global Platts: South Korea's crude oil imports from the US rise for the first time in 12 months in May, 2021
• refiners buying a minimum of four VLCCs/month of US crude in 2021
• light US grades ideal for raising middle distillate output yield (the Bakken is the lightest oil out there)
• widening Brent-Dubai spread favors Middle Eastern, US crude purchases;the world's fifth-largest crude importer received 1.227 million mt, or 8.99 million barrels, of US oil in May, up from 7.41 million barrels a year earlier, the customs data showed. The country has been receiving more than 4 VLCCs/month from the US since February.
• so, what's the vaccination status in South Korea? 25% of the country's population has gotten at least one jab (AstraZeneca; Pfizer; or Janssen
• so much more at the Platts link

By the way, did anyone see the paradox in the Bloomberg article regarding empty storage tanks at Cushing and why that is occurring?

The Price Of Oil -- For The Archives -- March 12, 2021

On March 10, 2021, a reader asked me "where" I thought crude oil was headed (with regard to price). My reply:

I've said often on the blog it's a fool's errand to try to predict the price of oil.

Having said that, the tea leaves suggest WTI / Brent are going to go much higher.

1. Saudi Arabia can't survive on $60-oil.
2. WTI/Brent are not back to where they were pre-pandemic.
3. Pre-pandemic we had a president who wanted much lower oil prices.
4. Post-pandemic we have a president who may not know what he wants, but his policies will push oil prices higher, all things being equal.
5. "Inflation" will push commodities higher.
6. US gasoline demand, according to GasBuddy, is already higher than pre-pandemic and most states have not lifted restrictions; summer driving season has not begun; and internationally, most countries are still in worse shape than the US with regard to Covid-19.
7. Articles in the mainstream media are being written by millennials; they are completely misreading the EV story. They appear to have no clue how 99% of electricity is generated.
8. Across the board, US E&P companies say they are more interested in focusing on growing free cash flow, not growing production.
9. If WTI can hold above $60 with these huge builds (last week, 20+ million bbls; this week, 14 million bbls) imagine what WTI should command once refiners get back on line and inventories drop.

I'm sure others can come up with nine reasons why WTI/Brent will slump to $20 this year. 

Scrolling through social media tonight, it appears I am exactly correct. There are those who can argue that the price of oil with increase significantly by the end of the year; other say that we've seen the high and are now in a trading range, with a possibility that the price of oil will trend lower going forward.

From social media this evening:

Re-Balancing: Oversupply To Last Longer Than Expected -- Source -- September 17, 2020

The first time I ever tagged a post with re-balancing was back on January 24, 2017. It's worth a read. I might re-post it as a "flashback" article some time. 

Between then and now, on a weekly basis, I have posted the amount of US crude oil in storage. The most recent spreadsheet pretty much tells the story:

I had to hide a lot of rows; if I didn't the spreadsheet would scroll for quite some time.

• week 0, November 21, 2018: 446.9 million bbls crude oil in US storage
• between then and now; rigs drop 75% or thereabouts; and, offshore drilling is pretty much dead;
• week 93, September 16, 2020: 496.0 million bbls crude oil in US storage an increase of almost 11%.

Now this, finally someone seems to be paying attention. Linking to Irina Slave:

OPEC and the International Energy Agency delivered bad news for the oil market this week. Both authorities revised their oil demand forecasts for this year, and both revised them downwards. But it is not just demand that will continue to weigh on oil prices. Supply is excessive and likely to remain so until the end of next year. On Monday, OPEC said in its Monthly Oil Market Report that it expected oil demand this year to shrink by 9.5 million bpd. That’s an upward revision of 400,000 bpd, from an expected contraction of 9.1 million bpd in August.

A day later, the IEA, in the latest release of its Oil Market Report, said it expected demand this year to contract by 8.4 million bpd. That’s a larger demand growth contraction than they were anticipated in the previous month, when the oil industry body expected a smaller contraction of 8.1 million bpd. 

Neither picture is rosy.

What’s even less rosy are the projections for supply. According to both authorities, at the end of next year, the global oil supply will be above levels from end-2019. The exact amount by which end-2021 stocks will exceed end-2019 stocks vary, but the very fact both OPEC and the IEA expect higher oil stockpiles after more than a year of sizeable OPEC+ production cuts is telling. And the story it is telling is not a happy one.

Re-balancing? LOL.

Whom Are They Trying To Kid? -- September 11, 2020

Last post for the morning. Good luck to all. See you all later today. 

Re-balancing?

Link here.