Saudi Arabia Ready to Start Pumping More Oil

[SamB + 1]

Impressed with the smooth sign-up and  connection. Thanks 

[Dennis Coyne + 82]

On ‎5‎/‎16‎/‎2018 at 9:51 AM, William Edwards said:

Possibly I am completely off base, but my reading of your comments suggest that, so far, you have not thought through the role of inventory in the petroleum system, including the recognition that the use of the term "inventory" is a gross oversimplification. There are three major categories of petroleum industry inventories, 1)cargo accumulation, 2) operational swing and 3) seasonal of speculative accumulation,and each performs separately and distinctly. All categories of inventory are a result, not a cause, of prices, economics and and operational features. The fundamental role of the various categories of inventories has not changed over the past fifty years. Thus observations of the activity through the various industry variations can be instructive.

It is true that I may not have a clue as to your definition and use of the term "comparative inventory. But my limited understanding would suggest that the "inventory" considered therein is a leader, not a follower. I reject this notion.

I think the important distinction is desired level of inventory and actual inventory level, the difference will influence prices and are the way the level of demand relative to supply is determined.

What does a seller do to the price level, if actual inventory is above the desired level? Does she raise the price or lower it?

[Dennis Coyne + 82]

14 hours ago, Tom Kirkman said:

I was responding to the comment preceding my comment.

If you read the article I linked to, it mentions that Saudi Arabia is ready, willing and able to increase their oil production, to offset any decreases from Iran.

Tom,

With the fall in both Iranian and Venezuelan output, and Brazil expected to have flat output (400 kb/d less than previously forecast) and with pipeline capacity problems in the Permian basin and in Canada, the limits of "real" OPEC spare capacity may become very apparent by  3Q 2018, it will be interesting to watch.  Oil prices are likely to approach $100/b before long.

See videos below, Amitra Sen from Energy Aspects

https://www.bnnbloomberg.ca/video/the-outlook-for-oil-after-trump-pulls-out-of-iran-nuclear-deal-part-1~1392828

and

https://www.bnnbloomberg.ca/commodities/video/the-outlook-for-oil-after-trump-pulls-out-of-iran-nuclear-deal-part-2~1392840

[William Edwards + 708]

1 hour ago, FABIAN ROAJS said:

Soy nuevo por aquí!, que el estudio valga la pena. 

Bienvenido. ¡Sigue estudiando!
 

[William Edwards + 708]

1 hour ago, Dennis Coyne said:

William,

The way reserves are reported in Saudi Arabia is very different than in the US.  The last time we had an accurate accounting of Saudi Reserves was in 1979 when proved reserves were about 110 billion barrels and 2P reserves were about 178 billion barrels (Gb).

The fact is that we don't really know the amount of reserves in the KSA, but we do know that about 111 Gb of C+C have been produced from 1980 to 2017.  Most of the fields that have been discovered in Saudi Arabia since 1979 have produced very little oil, any claims about reserves in those fields are highly suspect.  So perhaps Saudi 2P reserves are currently about 67 Gb and proved reserves are about 41 Gb, roughly similar to those of the US (35 Gb of C+C proved reserves at the end of 2016).

In addition, rules are very different in the US relative to most other nations which leads to a much higher rate of oil extraction than most other places.

So though I agree that potentially the US might reach 12 Mb/d in 3 or 4 years (depending on decline rates in the GOM, conventional onshore L48, and Alaska), I doubt KSA output can be ramped up to 12 Mb/d in 90 days and then be sustained for a year in the near term and that is essentially the definition of "spare capacity".   Perhaps in the future it may be possible.

Note that a simple Hubbert Linearization (a problematic method, but in this case there is little audited reserve data for KSA) suggests a URR of about 285 Gb (using 1995-2017 data), when 149 Gb of cumulative output through the end of 2017 is subtracted we are left with 135 Gb of 2P reserves and 84 Gb of proved reserves (based on 2P/1P ratio of 1.6).

I think it is very unlikely we will see 20 Mb/d produced by Saudi Arabia, and also believe they are unlikely to produce 12 Mb/d before 2025, if ever.

Also "a couple of years" to install more capacity is very different from "spare capacity",  I don't believe Saudi Arabia can produce 12.1 Mb/d 90 days from now, that's the claim, perhaps they could produce at 10.5 or even 11 Mb/d.

I will believe it when I see it.

Before we get too wound up in trying to decipher reserve numbers, about which we know very little, let us keep it simple in recognizing that there is probably more easily and cheaply recoverable oil under the sands of the Saudi desert than is under West Texas and New Mexico. Further, all official reserve figures are based, loosely, upon the disclaimer "economically recoverable with existing technology" which implies a price. Since the numbers haven't changed much from the $20 oil days, the numbers probably are based upon that type of number. If $100/B is used, the numbers are probably understated by a factor of five or ten. Bottom line is that we are kidding ourselves if we think that the world will ever run out of oil in the major reservoir locations. It will exhaust demand first, in my humble opinion.

[William Edwards + 708]

1 hour ago, Dennis Coyne said:

William,

See

https://ocw.mit.edu/courses/sloan-school-of-management/15-988-system-dynamics-self-study-fall-1998-spring-1999/readings/economics.pdf

Based on that systems dynamics model the changes in stock levels will influence the price.  If there is a rise in stock levels to higher than the desired level (say 30 days of supply or whatever is deemed "normal"), what would you expect to happen to the price level?

That is what comparative inventory analysis does.

If your time series did not cover the time period of the 1980's, then it is too limited. After you do your price/inventory assessment for that time period, using actual data, not theoretical assumptions, please enlighten me regarding your results.

[William Edwards + 708]

3 hours ago, Dennis Coyne said:

I think the important distinction is desired level of inventory and actual inventory level, the difference will influence prices and are the way the level of demand relative to supply is determined.

What does a seller do to the price level, if actual inventory is above the desired level? Does she raise the price or lower it?

I have a suggestion, Dennis, as to how you can move toward reality in your thinking regarding the impact of inventories on prices. First, realize that NOONE, neither buyer nor seller, has any numbers for inventory levels on a current basis. Three months later some indication for some categories may appear, but prices and sales transactions have occurred months before IN THE ABSENCE OF ANY INVENTORY DATA! But, you protest, the futures prices move instantly when the EIA reports numbers each week. True! But the futures traders are not buying and selling oil. They are dealing in futures contracts. Paper! Real oil is being bought and sold in a parallel but distinctly separate activity. And while the futures traders act on the weekly fiction from the EIA, real oil transactions are carried out for entirely different reasons than a report on composite inventory levels.

If you had had actual experience in buying or trading oil for a refinery ai would not have to be trying to explain this. But since you haven't, I am trying to substitute words and thoughts for experience and knowledge. So try to think through the sequence of an actual oil buying transaction.

[Tom Kirkman + 8,860]

3 hours ago, Dennis Coyne said:

Tom,

With the fall in both Iranian and Venezuelan output, and Brazil expected to have flat output (400 kb/d less than previously forecast) and with pipeline capacity problems in the Permian basin and in Canada, the limits of "real" OPEC spare capacity may become very apparent by  3Q 2018, it will be interesting to watch.  Oil prices are likely to approach $100/b before long.

See videos below, Amitra Sen from Energy Aspects

https://www.bnnbloomberg.ca/video/the-outlook-for-oil-after-trump-pulls-out-of-iran-nuclear-deal-part-1~1392828

and

https://www.bnnbloomberg.ca/commodities/video/the-outlook-for-oil-after-trump-pulls-out-of-iran-nuclear-deal-part-2~1392840

Dennis, here's my current take on oil prices over on LinkedIn.  Dang difficult to copy & paste text from LinkedIn using a mobile phone, so here is the link:

https://www.linkedin.com/feed/update/urn:li:activity:6402839546748334080

Pretty sure you will disagree with my views on this.  And no issue, I don't expect others to agree with my minority opinion.

[William Edwards + 708]

2 hours ago, Tom Kirkman said:

Dennis, here's my current take on oil prices over on LinkedIn.  Dang difficult to copy & paste text from LinkedIn using a mobile phone, so here is the link:

https://www.linkedin.com/feed/update/urn:li:activity:6402839546748334080

Pretty sure you will disagree with my views on this.  And no issue, I don't expect others to agree with my minority opinion.

Here it is, Tom. And history suggests that your view is the accurate one.

If oil prices hit triple digits this year, betcha oil prices will crash to below $40 in 2019. The higher the spike, the worse the backlash crash. Does 2014 and 2015 ring a bell with anyone? Bueller? ... Bueller? ... Bueller? Just waiting for some smart wag to spout off "but this time it's DIFFERENT !!!"

 

[Tom Kirkman + 8,860]

8 minutes ago, William Edwards said:

Here it is, Tom. And history suggests that your view is the accurate one.

Thanks William, both for copying & pasting the text from my LinkedIn post, and also for your vote of confidence.

[Bhimsen Pachawry + 72]

10 hours ago, Dennis Coyne said:

William,

The way reserves are reported in Saudi Arabia is very different than in the US.  The last time we had an accurate accounting of Saudi Reserves was in 1979 when proved reserves were about 110 billion barrels and 2P reserves were about 178 billion barrels (Gb).

The fact is that we don't really know the amount of reserves in the KSA, but we do know that about 111 Gb of C+C have been produced from 1980 to 2017.  Most of the fields that have been discovered in Saudi Arabia since 1979 have produced very little oil, any claims about reserves in those fields are highly suspect.  So perhaps Saudi 2P reserves are currently about 67 Gb and proved reserves are about 41 Gb, roughly similar to those of the US (35 Gb of C+C proved reserves at the end of 2016).

In addition, rules are very different in the US relative to most other nations which leads to a much higher rate of oil extraction than most other places.

So though I agree that potentially the US might reach 12 Mb/d in 3 or 4 years (depending on decline rates in the GOM, conventional onshore L48, and Alaska), I doubt KSA output can be ramped up to 12 Mb/d in 90 days and then be sustained for a year in the near term and that is essentially the definition of "spare capacity".   Perhaps in the future it may be possible.

Note that a simple Hubbert Linearization (a problematic method, but in this case there is little audited reserve data for KSA) suggests a URR of about 285 Gb (using 1995-2017 data), when 149 Gb of cumulative output through the end of 2017 is subtracted we are left with 135 Gb of 2P reserves and 84 Gb of proved reserves (based on 2P/1P ratio of 1.6).

I think it is very unlikely we will see 20 Mb/d produced by Saudi Arabia, and also believe they are unlikely to produce 12 Mb/d before 2025, if ever.

Also "a couple of years" to install more capacity is very different from "spare capacity",  I don't believe Saudi Arabia can produce 12.1 Mb/d 90 days from now, that's the claim, perhaps they could produce at 10.5 or even 11 Mb/d.

I will believe it when I see it.

You are not seeing the long term picture. Oil is the lifeline of Arabs by which they get food import and control over geopolitics. If they ramp up oil production, their oil reserves will empty quickly. Th Saudi oil reserves in 1979 included that which was alredy extracted. The 280GBL included the already extracted oil too and the OOIP was 530GBL which was also the original value rather than the value at 1979. 

KSA has about 115gbL oil as of now, not even enough to last till 2050. Do you expect them to ramp up production and ruin their future?

[Dennis Coyne + 82]

Bhimsen,

The reserves I reported were from the American operators of Aramoco in 1979, see Twilight in the Desert Appendix C.  I don't expect that KSA can continue producing at 10 Mb/d until 2050, they might develop some of their smaller fields as oil prices rise.  I agree with a 115 to 130 Gb 2P estimate, KSA is probably reporting 3P reserves plus contingent resources, nobody really knows.

If oil prices go to $150/b KSA may ramp up output, but I doubt they can get to 12 Mb/d easily, it will take a few years and the claim that they can easily get to 20 Mb is bunk, this claim has been around since 1970, the highest output we have seen is 10.5 Mb/d and it might not ever be surpassed.

[Dennis Coyne + 82]

8 hours ago, Tom Kirkman said:

Thanks William, both for copying & pasting the text from my LinkedIn post, and also for your vote of confidence.

Tom and William,

The difference this time is that the increase in World LTO output is limited to about a 3 Mb/d increase over the next 4 to 5 years, almost all of this will be US LTO output.  Many other nations are declining (UK, Norway, Mexico, and China), most other non-OPEC nations besides the US such as Canada and Brazil will just barely be able to match the decreases from other non-OPEC producers (excluding US),  OPEC will struggle to keep output flat due to declines in Iran and Venezuela.  This leaves only the US to increase output to attempt to satisfy increased World demand for oil.

Long term (1982-2017) World C+C output growth has been about 800 kb/d each year on average, let's assume supply is equal to demand over the long term so this is consumption growth as well.

If that continues over the next 5 years that would be an increased C+C output of 4000 kb/d needed, which will not be satisfied by the increase in US LTO growth of about 3000 kb/d, so higher oil prices may continue.  Also discoveries have not been good over the past 5 years and that is likely to continue.

So a "glut" of oil similar to 2014 is unlikely.

Below is my most recent model for future US LTO output, for some background see

http://peakoilbarrel.com/?s=US+LTO

in this recent model I have done an estimate for North Dakota Bakken, Eagle Ford, Permian, Niobrara, and other US LTO plays using well profile data at Enno Peters' shaleprofile.com and fitting hyperbolic well profiles to the data and using well completion rates to fit output data.  USGS estimates for Bakken and Permian and Drilling Deeper (David Hughes) for Eagle Ford are used to guide the URR, the weakest part of the analysis is Niobrara and US other LTO where I needed to guess at future URR.

The model URR (in Gb) of the Permian, Bakken, Eagle Ford, Niobrara, and other LTO until 2040 respectively are 29.1, 10.3, 8.2, 2.8, and 3.3.

Edited May 18, 2018 by Dennis Coyne

[Anas bahmed 0]

 

6 hours ago, Bhimsen Pachawry said:

You are not seeing the long term picture. Oil is the lifeline of Arabs by which they get food import and control over geopolitics. If they ramp up oil production, their oil reserves will empty quickly. Th Saudi oil reserves in 1979 included that which was alredy extracted. The 280GBL included the already extracted oil too and the OOIP was 530GBL which was also the original value rather than the value at 1979. 

KSA has about 115gbL oil as of now, not even enough to last till 2050. Do you expect them to ramp up production and ruin their future?

  The oil Arab country  some of them they export non-oil half of their import like in Saudi Arabia   so they will not be hungry  but they will be less wealthy ,and if you see in 2013 they export more then 600  billion Dollar this me around half of the export of USA. And.  Most of the country who have oil or Metal fortune they have same situation . Saudi Arabia  is rmember of OPEC so there will they couldn’t produce more oil after they make deal with   Other remember of OPEC.

https://tradingeconomics.com/saudi-arabia/exports

Edited May 18, 2018 by Anas bahmed

[Dennis Coyne + 82]

Tom,

You are aware of the large spread in Midland WTI of over $10/b, I assume, and the pipeline and rail constraints on Permian output as well as large price spreads and transportation issues in Canada, and Brazilian output expected to be flat yoy (vs earlier forecasts of a 400 kb/d increase) and Venezuelan declining output, and likely Iranian reduced exports of at least 400 kb/d.

Where do you expect the output will come from that will drive down prices from $100/b to $40/b in a years time?

Just wondering.

[Dennis Coyne + 82]

12 hours ago, William Edwards said:

I have a suggestion, Dennis, as to how you can move toward reality in your thinking regarding the impact of inventories on prices. First, realize that NOONE, neither buyer nor seller, has any numbers for inventory levels on a current basis. Three months later some indication for some categories may appear, but prices and sales transactions have occurred months before IN THE ABSENCE OF ANY INVENTORY DATA! But, you protest, the futures prices move instantly when the EIA reports numbers each week. True! But the futures traders are not buying and selling oil. They are dealing in futures contracts. Paper! Real oil is being bought and sold in a parallel but distinctly separate activity. And while the futures traders act on the weekly fiction from the EIA, real oil transactions are carried out for entirely different reasons than a report on composite inventory levels.

If you had had actual experience in buying or trading oil for a refinery ai would not have to be trying to explain this. But since you haven't, I am trying to substitute words and thoughts for experience and knowledge. So try to think through the sequence of an actual oil buying transaction.

Hi William,

Yes the World inventory levels are not known, but each individual business knows how much oil they own and how much they would like to own, yes?

There's a long term contract you say, so price doesn't matter.  How are the prices set in those long term contracts?  What about smaller producers that may sell some of their oil on the spot market?

Although for the market as a whole price discovery is a complex process (there is not really a single World oil price there are many different grades of oil and many different markets and prices), for any single business whose tanks are full and no place to put today's oil output, if they cannot sell their oil at x, they will offer it for sale at y<x because their actual inventory is above their desired inventory level.

I am talking about the microeconomics level, the macroeconomics is just the sum of all the microeconomic transactions.

[Anas bahmed 0]

 Is not possible $50/b  and stay long  because it would not be not good for investing and for the company so some companies will be bankruptcy. And if the supply become less then demand the price will be  above them $300. Until investing come back.

[Tom Kirkman + 8,860]

1 hour ago, Dennis Coyne said:

Where do you expect the output will come from that will drive down prices from $100/b to $40/b in a years time?

Just wondering.

History.  What goes up eventually comes down.

Also, here is part of one of my replies on LinkedIn to @MahyarEmami (who is also here on Oil Price forum)

"Oil trading seems to be based on both supply and demand, and geopolitics, as well as what the market will bear.  If oil prices increase drastically, then demand will reduce, increasing supply, and lowering prices.  At least that is my general understanding - I'm not an oil trader."

[Dennis Coyne + 82]

15 hours ago, William Edwards said:

If your time series did not cover the time period of the 1980's, then it is too limited. After you do your price/inventory assessment for that time period, using actual data, not theoretical assumptions, please enlighten me regarding your results.

William,

So your thesis is that prices do not affect supply?  Why did the rate of increase in World oil output change in 2015?  Over the long term it is increased World real GDP that drives oil output, over the short term price will affect both demand and supply.  

Maybe your one of those one bladed scissors folks.  You want to focus on demand, that's fine I agree demand drives things, but supply adjusts to demand in response to prices, that's the signal that tells suppliers more output is needed and the profit motive helps this to occur.

[Dennis Coyne + 82]

27 minutes ago, Tom Kirkman said:

History.  What goes up eventually comes down.

Also, here is part of one of my replies on LinkedIn to @Mahyar Emani (who is also here on Oil Price forum)

"Oil trading seems to be based on both supply and demand, and geopolitics, as well as what the market will bear.  If oil prices increase drastically, then demand will reduce, increasing supply, and lowering prices.  At least that is my general understanding - I'm not an oil trader."

Tom,

Yes oil prices go up and down, we are getting close to the point where oil output may not be able to match demand unless oil prices rise to very high levels.  Did oil prices decrease by 60% in a year's time the last time they reached triple digits in 2011?  My recollection was that Brent oil prices remained above $100 for 3.5 years (5 month centered average nominal Brent oil price) from Feb 2011 to August 2014.  So recent history suggests prices might come down after 3 years or so and the last time that occurred US LTO output had increased by 3.1 Mb/d over that 3.5 year period from 2011 to 2014, it will be challenging to repeat that while GOM and North Sea output are also likely to be declining along with Russia, China, Mexico, Venezuela, and Iran, so history may not repeat.  

Perhaps OPEC will save the day and produce so much that they drive oil prices down to $40/b, but why would they do that?

I do agree higher prices may increase quantity supplied and reduce quantity of demand (moving along the supply and demand curves).  Whether we see a quick response like in 2008 (when there was the biggest World recession since 1930), or whether the response will be more like 2011-2014 (when there was slow growth but no severe financial crisis Worldwide) remains to be seen.  I also foresee a World peak in C+C output by 2023-2027, so the oil market may remain tight until Great Depression 2 hits in 2030.

Edited May 18, 2018 by Dennis Coyne

[Tom Kirkman + 8,860]

Dennis, a few things... first, I am not an expert in oil prices, which might be unfortunate for a forum with the name Oil Price forum.  Mostly, I'm here as a moderator as a continuation from my previous role as a moderator on the now-defunct Oilpro forum. 

I like the active discussions about oil & gas, and try to encourage readers and lurkers to voice up.  See my profile here, in the "about me" section, where I clearly lay out who I am and why I am in this forum as a moderator.

My main interest is in global oil & gas, and its related global politics.

I have my own opinions about oil prices, probably just like everyone else on this forum.  But I am not an oil trader, nor do I dispense oil trading advice, just my own opinions.

So I'll repeat my earlier comment:

If oil prices increase drastically, then demand will reduce, increasing supply, and lowering prices.  At least that is my general understanding - I'm not an oil trader.

[Dennis Coyne + 82]

16 hours ago, William Edwards said:

Before we get too wound up in trying to decipher reserve numbers, about which we know very little, let us keep it simple in recognizing that there is probably more easily and cheaply recoverable oil under the sands of the Saudi desert than is under West Texas and New Mexico. Further, all official reserve figures are based, loosely, upon the disclaimer "economically recoverable with existing technology" which implies a price. Since the numbers haven't changed much from the $20 oil days, the numbers probably are based upon that type of number. If $100/B is used, the numbers are probably understated by a factor of five or ten. Bottom line is that we are kidding ourselves if we think that the world will ever run out of oil in the major reservoir locations. It will exhaust demand first, in my humble opinion.

William.

The oil won't "run out" , it just becomes more costly to produce at high rates as the best reservoirs get produced first.  Note that an assumption that oil reserves increase in direct proportion to price is silly.  Just look at the change in US proved reserves when prices fell in half from 2014 to 2015, were they 50% lower in 2015 compared to 2014, no!  They went from 40 Gb in 2014 to 35 Gb in 2015.

How about 7.5 times higher from 1998 to 2008?  In 1998 US proved reserves were 21 Gb and the average annual oil price was $13/b, were proved reserves 7.5 times higher in 2008 when the average annual oil price was $97/b, that is 157 Gb?  No, actual US proved crude reserves in 2008 were 19 Gb, over 8 times lower than William suggests.

Ah, but we have the magic of technological progress so reserves will increase forever. For example in 1971 US proved reserves were 38 Gb so they must be much larger now due to all the technology, but alas at the end of 2016 US crude reserves were 33 Gb.

I do agree that ceteris paribus higher prices will increase reserves, but a doubling of prices does not lead to a doubling of reserves.

[Rodent + 1,424]

I must admit, my head is spinning a little bit from this oil price discussion. I LIKE IT!!! 

Someone mentioned above about Saudi Arabia's reserves being tied to oil prices (or dependent on, rather). While I can't speak to all the ins and outs of what went into establishing Saudi Arabia's recoverable reserves, it would logically follow that "recoverable" is conditional on the price of oil. More oil is recoverable at $120 a barrel than at $10 per barrel. That said, I do find it particularly odd that Aramco has, year after year, reported the same level of reserves. I would understand that if the price continued to increase (or costs continued to decrease) at a steady rate, but I don't believe that to be true.

Normally I would say Aramco is fully of hooey, but this time their reserves were independently audited. It's like the loaves and the fishes. They just never run out, it seems. MAGIC! 

[Dennis Coyne + 82]

31 minutes ago, Tom Kirkman said:

Dennis, a few things... first, I am not an expert in oil prices, which might be unfortunate for a forum with the name Oil Price forum.  Mostly, I'm here as a moderator as a continuation from my previous role as a moderator on the now-defunct Oilpro forum. 

I like the active discussions about oil & gas, and try to encourage readers and lurkers to voice up.  See my profile here, in the "about me" section, where I clearly lay out who I am and why I am in this forum as a moderator.

My main interest is in global oil & gas, and its related global politics.

I have my own opinions about oil prices, probably just like everyone else on this forum.  But I am not an oil trader, nor do I dispense oil trading advice, just my own opinions.

So I'll repeat my earlier comment:

If oil prices increase drastically, then demand will reduce, increasing supply, and lowering prices.  At least that is my general understanding - I'm not an oil trader.

Tom,

I agree with your comment in bold above.

I was mostly talking about this comment where you said:

Quote

If oil prices hit triple digits this year, betcha oil prices will crash to below $40 in 2019. The higher the spike, the worse the backlash crash. Does 2014 and 2015 ring a bell with anyone? Bueller? ... Bueller? ... Bueller? Just waiting for some smart wag to spout off "but this time it's DIFFERENT !!!"

I also am not an oil trader or an expert on oil prices.

My question was your expectation That triple digit oil prices in 2018 (if that should occur) might lead to a fall in prices to $40/b in 2019.

Is your expectation that there will be another Global financial crisis in 2018 if prices reach $100/b or higher (a severe recession with a frequency of about 1 out of every 69 years)?  Seems unlikely to me, I think it more likely prices will remain in the $80/b to $120/b window (5 month centered real Brent oil prices in 2018$) until 2025 and then prices will trend higher from there as peak oil becomes apparent.

Note I am usually wrong about oil prices, so your guess may be better.

Edited May 18, 2018 by Dennis Coyne

[Rodent + 1,424]

8 minutes ago, Dennis Coyne said:

Ah, but we have the magic of technological progress so reserves will increase forever. For example in 1971 US proved reserves were 38 Gb so they must be much larger now due to all the technology, but alas at the end of 2016 US crude reserves were 33 Gb.

Agree, technology, particularly in the case of US shale, has increased US reserves. Also better data regarding the reserves may play into this as well.  Not sure they will increase "forever" though.