Energy Watchdog Warns Of Oil-Production Crunch - WSJ

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http://online.wsj.com/article/SB121139527250011387.html?mod=googlenews_wsj">IEA Official Says Supplies May Plateau Below Expected Demand

The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.

The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.

A pessimistic supply outlook from the IEA could further rattle an oil market that already has seen crude prices rocket over $130 a barrel, double what they were a year ago. U.S. benchmark crude broke a record for the fourth day in a row, rising 3.3% Wednesday to close at $133.17 a barrel on the New York Mercantile Exchange.

For several years, the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently. Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.

The decision to rigorously survey supply -- instead of just demand, as in the past -- reflects an increasing fear within the agency and elsewhere that oil-producing regions aren't on track to meet future needs.

"The oil investments required may be much, much higher than what people assume," said Fatih Birol, the IEA's chief economist and the leader of the study, in an interview with The Wall Street Journal. "This is a dangerous situation."

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But, of course, peak oil is one giant conspiracy and the IEA is in on it. :sarcasm:

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1. Punt for the morning crowd...n/t

[hatrack]

2. Yes, it's those evil, evil speculators, and Chinese demand isn't rising at ALL!!

:eyes:

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3. No one buying Tatas in India either. But there's also this:

From the article: "Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades."

We've been on a crude oil PRODUCTION plateau that has reached only 74.66 million barrels per day. And the oil majors, by their own admission during two days of Congressional hearing, are running as hard they can to keep up with demand. But, oh, btw, they also said there's plenty of oil but please, please, please, let us drill the ANWR and the coastal shelves. 100 million barrels per day, huh? WE WILL NEVER REACH 80 MILLION BARRELS PER DAY! Meanwhile, demand will continue to increase 2% yoy while production continues to ride a 2% declining plateau in production until next year when production will begin a cliff-dive at 4% yoy while demand continues to rise.

The bitch of it is that the harder Big Oil works to catch up with demand, the steeper that cliff will be once we tip over it and the harder we will fall.

BTW, hi hatrack! Good to see you over here in GD.

[Hubert Flottz]

4. Let's see now...who owns the WSJ now?

And even before Brother Rupert bought the WSJ, it was already Bush's go to propaganda organ.

The Funny Papers are probably a far better place than the WSJ, to EVER get a straight story. WSJ/FOX