World oil consumption dropped by 1.2 million barrels a day last year, the biggest decline since 1982, according to a study released June 9 by BP [2]. "Energy developments in 2009 were dominated by a global recession and, later in the year, a tentative recovery," said Tony Hayward, BP's embattled chief executive who's become a media fixture in the wake of the massive Gulf of Mexico oil spill [3]. "We can't know how durable this recovery will be," he added. "But the data show changes in the pattern of global energy consumption that are likely to indicate long-term change."
Proven oil reserves actually rose by 700 million barrels to a total of 1.33 trillion, thanks to increases in Brazil, Denmark, Saudi Arabia, Egypt and Indonesia, according to BP's statistical review for 2009. The study also showed proven reserves fell in Mexico, Russia, Norway and Vietnam.
At the same time, US oil production surged by 460,000 barrels a day, the biggest increase in the world and the strongest US growth in 40 years. Globally, the report indicated that oil production fell by about 2 million barrels a day, due mainly to a reduction of about 1.1 million barrels in Saudi Arabia's daily output. (Dow Jones [4], June 9)
The US Energy Department meanwhile reduced its crude oil price forecast for 2010 on concerns about slow global economic growth. West Texas Intermediate oil, the US benchmark, will average $78.75 a barrel this year, down from last month's forecast of $82.18, according to its monthly Short-Term Energy Outlook, released June 9. That's 28% higher than the 2009 average of $61.66 a barrel.
Prices will climb 4.8 percent to average $82.50 a barrel in 2011, the report predicts. The estimate for next year is down 3.5% from May's report. "The lower price forecast reflects the change in market expectations," said Tancred Lidderdale, a government economist in Washington who supervised the monthly outlook. "Concerns about the economy have sent stock and oil prices lower, and may show up in lower demand." (Bloomberg [5], June 8)
This may be bad news for BP, but it is good news for the rest of us [6], in the long run at least. Dare we hope this is the beginning of the end of petro-oligarchical rule [7]?
See our last post on the global struggle for control of oil [8].
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