OPEC Reveal Global Light Sweet Crude Peaked
by Chris Vernon
Vital Trivia - Trivial thoughts on vital subjects (August 20 2005)
I'm writing this after last week's story that oil extraction rates from Western oil majors have peaked and are now in decline. This week we learn that light sweet crude oil has also peaked globally and is now in decline.
This information has come to us from a most unexpected source, the Organisation of Petroleum Exporting Countries (OPEC) itself. OPEC publish a monthly report on the global oil market and the August 2005 issue {1} has data on non-OPEC and OPEC oil extraction by weight and sulphur content from 2000 to 2004.
In 2000, non-OPEC crude output was 66 million barrels per day and the split of non-OPEC crude production by light (over 35 API gravity), medium (26 to 35 API gravity), and heavy (under 26 API gravity) was approximately 41%, 44%, and 15%, respectively. {2}
However, in 2004 with production at 70 million barrels per day, the split was 34%, 49%, and 18%, respectively. In terms of sulphur content, 47% of crude production in 2000 was sour (sulphur > 0.5%) whilst in 2004 it was 51%.
OPEC crude production during the 2000 to 2004 period saw an average increase of one million barrels per day of light sweet and 0.9 million barrels per day of medium sour crudes, while heavy sour output dropped 0.7 million barrels per day ... See August 2005 OPEC Monthly Oil Market Report, Page 4 {3}
The key point is that non-OPEC light sweet crude went from 41% of 66 million barrels per day to 34% of 70 million barrels per day from 2000 to 2004, a drop of 3.26 million barrels per day. OPEC added one million barrels per day of light sweet crude over the same period resulting in a global reduction of light sweet crude of over two million barrels per day showing that global light sweet crude has peaked and is now in decline.
Although the total volume of "oil" extracted in 2004 compared with 2000 has increased, the proportions of different grades of oil have shifted. Light sweet crude is the most attractive because it is easier to refine, global refining capacity is geared to light sweet crude of which there is now a shortage. This shift in grades has resulted in a shortage of refining capacity for the available medium & heavy sour oil and tough competition for the reduced amount of light sweet oil available.
It is these two factors (less light sweet oil available and lack of refining capacity for the medium & heavy sour oil) that are chiefly responsible for the current high prices.
As oil becomes scarce it is clear that the best stuff will be pumped first, the best stuff is the light sweet crude. The fact that this is now in decline adds more weight to the argument that that the total global oil extraction rates will soon peak.
To recap:
* Individual countries have peaked (America, Norway, Venezuela, UK, Indonesia etc.)
* Individual companies have peaked (Chevron, Exxon, Shell, Total)
* Individual grades of oil have peaked (Light sweet crude)
The only thing left to peak is total all oil extraction rates for which the experts predict 2007/8.
Chris Vernon chris@vitaltrivia.co.uk
Vital Trivia - Trivial thoughts on vital subjects (August 20 2005)
http://www.vitaltrivia.co.uk/2005/08/26
Notes
{1} 　http://www.opec.org/home/Monthly%20Oil%20Market%20Reports/2005/MR082005.htm
{2} See "What is oil?" below.
{3} http://www.opec.org/home/Monthly%20Oil%20Market%20Reports/2005/pdf/MR082005.pdf
{4} "Peak Oil: Two Approaches, One Answer" by Chris Vernon (June 28 2005)
http://www.vitaltrivia.co.uk/2005/06/21
What is oil?
Crude oil is naturally occurring petroleum. Petroleum is the general term for solid, liquid or gaseous hydrocarbons. Hydrocarbons are a class of organic compounds consisting only of carbon and hydrogen and which are the basis of oil, natural gas and coal.
Technically, crude oil consists of pentanes (hydrocarbon chains consisting of five carbon atoms and twelve hydrogen atoms) and heavier hydrocarbons (hydrocarbon chains longer than five carbon atoms in the formula). It may also contain other materials such as water, natural gas, sulphur and other minerals.
Conventional crude oil is oil that flows naturally or that can be pumped without being heated or diluted. Crude oil is commonly classified as light, medium or heavy, referring to its gravity as measured on the American Petroleum Institute (API) Scale. The API gravity is measured in degrees and is calculated using the formula
141.5 / SG - 131.5 = API Gravity
where SG stands for Specific Gravity.
Light crude oil is defined as having an API gravity higher than 31.1 degrees, medium oil as having an API gravity between 22.3 degrees and 31.1 degrees, and heavy oil as having an API gravity below 22.3 degrees. Conventional heavy oil from the Lloydminster, Alberta area has an API gravity ranging from 9 degrees to 18 degrees.
Oil that does not flow, or cannot be pumped without being heated or diluted is called bitumen, and generally has an API gravity of less than ten degrees. The bitumen mined from the oil sands deposits in the Athabasca area of Alberta, Canada has an API gravity of around eight degrees, but is upgraded to an API gravity of 31 degrees to 33 degrees. This upgraded oil is known as synthetic oil.
Oil containing sulphur compounds, especially hydrogen sulphide, is known as sour oil.
Liquids obtained during production of natural gas are known as natural gas liquids (NGLs) and include ethane, propane, butane and condensate, which comprises pentanes and heavier hydrocarbons.
http://www.centreforenergy.com/generator.asp?xml=%2Fsilos%2Foil%2FoilOverview01XML.asp&Template=1,1
Bill Totten http://www.ashisuto.co.jp/english/
Vital Trivia - Trivial thoughts on vital subjects (August 20 2005)
I'm writing this after last week's story that oil extraction rates from Western oil majors have peaked and are now in decline. This week we learn that light sweet crude oil has also peaked globally and is now in decline.
This information has come to us from a most unexpected source, the Organisation of Petroleum Exporting Countries (OPEC) itself. OPEC publish a monthly report on the global oil market and the August 2005 issue {1} has data on non-OPEC and OPEC oil extraction by weight and sulphur content from 2000 to 2004.
In 2000, non-OPEC crude output was 66 million barrels per day and the split of non-OPEC crude production by light (over 35 API gravity), medium (26 to 35 API gravity), and heavy (under 26 API gravity) was approximately 41%, 44%, and 15%, respectively. {2}
However, in 2004 with production at 70 million barrels per day, the split was 34%, 49%, and 18%, respectively. In terms of sulphur content, 47% of crude production in 2000 was sour (sulphur > 0.5%) whilst in 2004 it was 51%.
OPEC crude production during the 2000 to 2004 period saw an average increase of one million barrels per day of light sweet and 0.9 million barrels per day of medium sour crudes, while heavy sour output dropped 0.7 million barrels per day ... See August 2005 OPEC Monthly Oil Market Report, Page 4 {3}
The key point is that non-OPEC light sweet crude went from 41% of 66 million barrels per day to 34% of 70 million barrels per day from 2000 to 2004, a drop of 3.26 million barrels per day. OPEC added one million barrels per day of light sweet crude over the same period resulting in a global reduction of light sweet crude of over two million barrels per day showing that global light sweet crude has peaked and is now in decline.
Although the total volume of "oil" extracted in 2004 compared with 2000 has increased, the proportions of different grades of oil have shifted. Light sweet crude is the most attractive because it is easier to refine, global refining capacity is geared to light sweet crude of which there is now a shortage. This shift in grades has resulted in a shortage of refining capacity for the available medium & heavy sour oil and tough competition for the reduced amount of light sweet oil available.
It is these two factors (less light sweet oil available and lack of refining capacity for the medium & heavy sour oil) that are chiefly responsible for the current high prices.
As oil becomes scarce it is clear that the best stuff will be pumped first, the best stuff is the light sweet crude. The fact that this is now in decline adds more weight to the argument that that the total global oil extraction rates will soon peak.
To recap:
* Individual countries have peaked (America, Norway, Venezuela, UK, Indonesia etc.)
* Individual companies have peaked (Chevron, Exxon, Shell, Total)
* Individual grades of oil have peaked (Light sweet crude)
The only thing left to peak is total all oil extraction rates for which the experts predict 2007/8.
Chris Vernon chris@vitaltrivia.co.uk
Vital Trivia - Trivial thoughts on vital subjects (August 20 2005)
http://www.vitaltrivia.co.uk/2005/08/26
Notes
{1} 　http://www.opec.org/home/Monthly%20Oil%20Market%20Reports/2005/MR082005.htm
{2} See "What is oil?" below.
{3} http://www.opec.org/home/Monthly%20Oil%20Market%20Reports/2005/pdf/MR082005.pdf
{4} "Peak Oil: Two Approaches, One Answer" by Chris Vernon (June 28 2005)
http://www.vitaltrivia.co.uk/2005/06/21
What is oil?
Crude oil is naturally occurring petroleum. Petroleum is the general term for solid, liquid or gaseous hydrocarbons. Hydrocarbons are a class of organic compounds consisting only of carbon and hydrogen and which are the basis of oil, natural gas and coal.
Technically, crude oil consists of pentanes (hydrocarbon chains consisting of five carbon atoms and twelve hydrogen atoms) and heavier hydrocarbons (hydrocarbon chains longer than five carbon atoms in the formula). It may also contain other materials such as water, natural gas, sulphur and other minerals.
Conventional crude oil is oil that flows naturally or that can be pumped without being heated or diluted. Crude oil is commonly classified as light, medium or heavy, referring to its gravity as measured on the American Petroleum Institute (API) Scale. The API gravity is measured in degrees and is calculated using the formula
141.5 / SG - 131.5 = API Gravity
where SG stands for Specific Gravity.
Light crude oil is defined as having an API gravity higher than 31.1 degrees, medium oil as having an API gravity between 22.3 degrees and 31.1 degrees, and heavy oil as having an API gravity below 22.3 degrees. Conventional heavy oil from the Lloydminster, Alberta area has an API gravity ranging from 9 degrees to 18 degrees.
Oil that does not flow, or cannot be pumped without being heated or diluted is called bitumen, and generally has an API gravity of less than ten degrees. The bitumen mined from the oil sands deposits in the Athabasca area of Alberta, Canada has an API gravity of around eight degrees, but is upgraded to an API gravity of 31 degrees to 33 degrees. This upgraded oil is known as synthetic oil.
Oil containing sulphur compounds, especially hydrogen sulphide, is known as sour oil.
Liquids obtained during production of natural gas are known as natural gas liquids (NGLs) and include ethane, propane, butane and condensate, which comprises pentanes and heavier hydrocarbons.
http://www.centreforenergy.com/generator.asp?xml=%2Fsilos%2Foil%2FoilOverview01XML.asp&Template=1,1
Bill Totten http://www.ashisuto.co.jp/english/
posted by Bill Totten at
8:00 AM
0 Comments:
Post a Comment
<< Home