Thursday, August 14, 2008

EIA Short Term Energy Outlook

The U.S. Department of Energy EIA Short Term Energy Outlook is available.  Though there forecasts have usually been wrong (they continually underestimated prices and overestimated supplies during the 2002 - 2007 period), I thought it very poignant that they are now publishing that their forecasts COULD BE WRONG because of "accelerating declines in some older fields", exactly what we have been shouting about, and they have been ignoring, for years.  Here is the paragraph (link is above):

Non-OPEC Supply. EIA is revising this month's outlook for non-OPEC supply growth in 2008 compared with last month's, largely because of project delays in Asia, lower output growth now expected in the Former Soviet Union, lower growth in Canada caused by the upward revision of 2007 data, and reduced production in Azerbaijan due to the closure of the BTC pipeline. If new projects come online as now anticipated, total non-OPEC supply is projected to rise by about 510,000 bbl/d in the second half of 2008 and by 850,000 bbl/d in 2009 compared with year-earlier levels. This compares with a 330,000 bbl/d decline in non-OPEC supply recorded during the first half of 2008. Non-OPEC supply growth through 2009 is expected to be led by Brazil, the United States, and Azerbaijan (Non-OPEC Oil Production Growth). Given recent history, possible additional delays in key projects as well as accelerating production declines in some older fields cannot be ruled out. For example, Russian oil output was down by almost 1 percent in the first half of the year, raising the chances for the first annual decline in output since 1998. As a result, net non-OPEC production gains could be less than the current forecast, leading to both higher demand for OPEC oil and higher prices than currently projected.

Anyway, since I beat them about the head and shoulders when they whitewash over the salient issues, it is only fair that I give them some kudos when they get it right.

It is really worth the time to read the report.

Meanwhile, back at the ranch...

The EIA will release its Natural Gas Inventory report at 10:35.  I have no prediction on what it will look like, but if the build continues to underperform last year's injection, then SOMEONE really needs to take their reported numbers on Nat Gas production, consumption, and disposition apart, because once again... the numbers just don't add up.

Mentatt (at) yahoo (dot) com

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