Merrill Lynch - Non-OPEC Oil Production Possibly Peaked - "Steeper Output Declines Going Forward"

[hatrack]

Merrill Lynch on Tuesday said that crude oil production from non-OPEC nations may have already peaked, nothing that oil production decline rates were a function of investment rates, as well as the size and age of oil fields. 'All these factors point to steeper oil output declines going forward,' the firm wrote.

EDIT

'Should the credit crunch push decline rates to 6 percent, however, non-OPEC production could decline precipitously toward million barrels per day by 2015 from the current levels,' it wrote.

EDIT

http://www.forbes.com/feeds/afx/2009/02/03/afx6002345.html

[DJ13]

1. Sounds like a desperate call by an outfit still stuck in oil futures

[AndyA]

5. BINGO! They want to give back all that TARP money so they can keep their bonuses,

so they've got to get those oil prices back up again!

EVIL ASSHOLES!

[Idealism]

2. Certain firms have been trying to scare us into thinking Russia has peaked for years

Some investment houses are stuck in the oil commodity past instead of the green future

[NickB79]

4. Uh, the fact that Russian oil output DECLINED is what's scaring us to think they've peaked

http://uk.biz.yahoo.com/03012009/325/russia-oil-output-falls-first-time-decade.html

And it declined during a period in time when oil was at $100+/barrel :wtf:

[Idealism]

6. The last quarter and a half

oil was not at 100 dollars per barrel.

Russia cut back production because of falling oil prices, as OPEC did numerous times. Russia is not a member of OPEC, and tries to set their prices accordingly.

This article states their output dropped 1%, which is a paltry amount to be sure, and something they could have easily done (and should have) the last quarter of the year to try to halt the falling prices.

[NickB79]

10. Their decline began before the price peak in July

http://www.economist.com/business/displaystory.cfm?story_id=11332313

http://www.russiaprofile.org/page.php?pageid=Business+New+Europe&articleid=a1184076713

http://www.bloomberg.com/apps/news?pid=20601072&sid=arXTpOY4omL4&refer=energy

Look at the dates on all those links. They were all written when oil was over $100/barrel.

[GliderGuider]

7. What about that pesky North Sea problem?

And the United States of America? And Mexico and Venezuela? And a host of smaller producers around the world?

Pointing to Russia does nothing to derogate the probability of an aggregate non-OPEC production peak.

[Idealism]

8. I fear the data these so called analysts are using

is based off of production cuts due to the downturn of commodity prices. The non-OPEC countries don't have targeted production cuts decided at central meetings scheduled once a month like OPEC does, so they may haphazardly drop production in the face of slowing global demand.

Also, these people have vested interests in drumming up fear over oil being scarce, as Merrill-Lynch in particular has invested heavily in storage of oil in hopes of profiting on the futures market by taking delivery themselves and in actual reserves.

[GliderGuider]

9. Oil production in the USA has been declining since 1970

Production in Mexico has been declining since 2004, in Norway since 2001, in the UK since 1999, in Venezuela since 1998 (all data taken from The BP Statistical Review of World Energy 2008 -- XLS).

Regardless of what's been happening to international oil prices in the last six months, these trends are well established, and were evident before the price peak. Peak Oil is a real phenomenon, I'm afraid.

Russia's production has been extremely variable over the past 20+ years, but that has more to do with their internal economic and political situation than the physical state of their oil fields. Russia appears to be holding their own compared to the other major non-OPEC producers, but it's reasonable to think that without the decade-long production slump they experienced from 1992 to 2002 their picture would be much different today. Those ten years left about 50 million barrels, or 5 years' production, in the ground.

[corruptmewithpower]

3. That will bring about a brighter future sooner.

I envision myself commuting in an electric golf cart juiced up via wind, solar, geothermal, tidal, and nuclear powerplants.

[hunter]

11. Optimistic that...

I'm envisioning commuting with shoes. With climate change and increasing human populations a most excellent outcome will be having a place to live and something to eat.

I wish people would stop talking about tidal power as if it's a benign thing. Of all your energy proposals it is by far the most environmentally destructive.