In what must be an imminent Doomer’s worst nightmare, the IEA has signaled that October 2007 was the highest ever oil production month on record. After reporting that September production came in at 85.1 million barrels per day, the IEA is reporting for October:
World oil supply saw a monthly gain of 1.4 mb/d in October, as non-OPEC outages receded and OPEC volumes increased. Recovery in China and Azerbaijan plus rising Russian output boosted non-OPEC supplies. Continued outages in the OECD see non-OPEC supply levelling off in November before resuming growth in December.
The previous all-time high in July 2006 – which Doomers had pointed at for over a year now as “Peak Oil in the rearview mirror” – had been 85.467 million barrels per day. If the September number is not revised down (which it certainly could be), and the October number stands, the previous record will be shattered by over a million barrels a day.
So, what do you think people are going to think about those who confidently predicted that 2005, and then later 2006 was the peak? “They are crying wolf again.” This is exactly why I have urged caution with people when they are confidently proclaiming that oil production has peaked. The evidence was not strong enough to make such confident proclamations, and credibility is being lost each time a new production record is set. Meanwhile, we still have a pending energy crisis, and lost credibility won’t help us win any arguments.
Other news from the report:
Global demand for 4Q07 is revised down by 0.5 mb/d given high prices, weaker-than-expected data from the US and FSU, and delays to European heating oil restocking. Coupled with lower GDP growth, these revisions extend to the 2008 forecast, which has been adjusted down by 0.3 mb/d.
So, let’s review. We have an apparent all time high oil supply in October, and at the same time demand is being revised downward. Is it any wonder that oil is quickly back-pedaling from $100? The speculators have taken some big losses this week, and are in serious danger of steeper losses by Friday. I expect the chorus of voices who were justifying $100 oil a couple of weeks ago to start dying down, and the analysts to quickly develop amnesia about those forecasts.