Friday, June 14, 2013
Above is the latest data on global oil supply (all liquids from various sources above, and the green curve being only crude and condensate below). We continue to be in a pattern in which supply has been very flat since the beginning of 2012. A close up just of the last few years shows this better:
Despite the flat supply, prices have fallen over the last year:
Presumably the fairly high prices sustained since the mid 2000s have set in motion enough conservation efforts in the OECD that demand is falling there enough to accomodate the rising developing country demand, without prices increasing further. I would not expect Brent prices to fall below $100 though, at least not for long, as Saudi Arabia will cut back production to support them.
For those who would like more background on these issues, I made some attempt to explain here.