Something (now edited) I wrote on another forum in reply to a comment on my oil-production post discussing the figures put out by OPEC, the UN, APEC, the IEA and others indicating a 14% drop in worldwide oil production in the month of December alone...
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"This has got to be a typo, this much drop in output."
I really, really hope so.
But again, I wouldn't bet my life on it.
Even if we can rule out a full 14% drop globally, that also leaves the 4.9% drop in Saudi exports, and the net 2% drop in OPEC exports. You can bet those aren't just typos.
2% a month, if that continues, is catastrophic in itself -- in 12 months you're down to less than 80% production. 5% takes you down to around 54% in the same time frame.
14%, of course, drops you to to 40% in six months, and a little over 16% in 12.
So that's bad.
The commenter continued...
"Wait for a revision, and never draw a trend from a single data point."
You know, I'm really darned optimistic, but I really wouldn't just wait. Even if we somehow get upgraded to a mere 2% global drop, we're in trouble.
There are two happier possibilities regarding the numbers.
One, that the January figures represent a number of countries finally "coming clean" about their real production numbers all at once.
There are a few problems with that. One, why would that happen all in the same month? This program has been going on for some time, why not spread out your revisions over several months? Why not "smooth it out" -- include it in the data in the form of some back-revised numbers recalculating monthly production?
And finally, where are the January numbers? There's only a week left to February, and in an age of email, surely collecting the official numbers from participating governments and running them through Excel isn't that hard.
Two, and this is slightly more likely, though limited in its impact... Maybe the figures are real, but represent a bunch of countries rapidly crashing down to near-zero. In which case, they might stop falling because there's really nowhere else to go.
The downside to that is if Saudi Arabia's drop in December was really only a mere 2%, that represents a fall more catastrophic than Cantarell's. And if it presages a Saudi fall off the backside cliff of Hubbert's curve, it could go fast.
I mean, really fast.