Global oil demand had been growing steadily since 1984 when the recession hit in 2008. But the economic toll also took a toll on growing demand, and levels remained relatively stagnant at 85 million barrels per day between 2006 and 2008, actually falling below that level in 2009.
In 2010, the world began pulling out of the recession, when demand grew to over 87 million barrels per day. And though it’s been a very gradual improvement, the global economy is recovering.
This is apparent in the extent to which oil demand has grown since then. In 2011, demand was 88.2 million barrels per day. In 2012, it was 88.9.
And OPEC recently announced the figure for this year is estimated at 89.7 million barrels per day, an average 800,000 barrels per day more.
But the world has never produced that much. The most total oil the world has ever produced was 89.0 million barrels per day, achieved in October 2012.
The most crude oil the world has ever produced was 79.99 million barrels per day in April 2012.
It’s true, the world has been consuming more oil than it produces for years. According to the International Energy Agency, crude oil production peaked in 2006.
The shale boom has helped North America and the rest of the world continue to increase total liquids, but that includes more than just crude oil.
It’s called unconventional oil. It’s stuck in the shale rock formations, in deposits we previously thought too difficult or even impossible to tap.
New improvements on drilling technology have now allowed us to tap them. But the problem with these unconventional deposits is that they’re much harder to access than the conventional crude oil deposits. They require more resources, different technologies, and much more money.
For all intents and purposes, crude oil has peaked. And the shale oil, natural gas liquids, and other liquids that will replace it are going to be different and from different locations around the globe.
OPEC has announced it would increase its planned output in 2013, estimating production of 29.8 million barrels per day on average.
But the group’s production in January was higher than this at 30.3 million bpd.
“Given some signs of recovery in the global economy and colder weather at the start of this year, the forecast for world oil demand growth in 2013 has also been revised up,” OPEC’s Vienna-based secretariat said. “The bulk of the growth is seen coming from China.”
Oil demand in developing nations is growing rapidly. China and India have a seen an uptrend in power demand, as have major oil producers like Saudi Arabia.
This is beginning to pose a problem. Though Saudi demand peaked over the summer, it’s likely to go back up again throughout the year. The nation is interested in curbing domestic demand, working on renewable energy projects in an effort to do so.
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Saudi Arabia output dropped in December to 9 million bpd from what had been around 9.9 million bpd for the first half of the year, rising as high as 10.1 million bpd during April and June. It was suggested that the nation decreased its output in order to manipulate crude prices, though Saudi Arabia has denied those allegations.
The truth is, crude oil output isn’t going to last. The world has unconventional petroleum to rely on, though obtaining those fuels can prove very expensive. But crude oil has peaked, and now even more developing nations are growing to the point where higher oil demand is only natural.
And as that happens, the gap between oil production and demand will only continue to grow.
That’s all for now,
Energy & Capital’s modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends.