Oil Production and Consumption

 

oilstock

Image via Taylor Russell

 

The first chart shows global oil production, by month, based on latest EIA data.  2014 saw significant production increases after fairly flat production in ’12 and ’13.

 

1-global oil productionGlobal crude oil production (source, EIA) – click to enlarge.

 

And just so we’re clear where nearly all the production gains came from … check 2005 and note global production (x-US / Canada) barely rises on the spiking price…but US / Canada production rockets 7mbpd over the period.

 

2-global-prod-ex-USGlobal crude oil production plus production ex US and Canada (source, EIA) – click to enlarge.

 

A close up of US / Canadian production (below).

 

3-US-Canada-productionCombined US and Canadian production (source, EIA) – click to enlarge.

 

The below chart highlights the falling consumption in 2014 (demand) of the 34 OECD advanced economy nations despite larger total populations and trillions in stimulus and new debt.

 

4-OECD-consumptionOil consumption of OECD advanced economies (source, EIA) – click to enlarge.

 

But advanced economy declining demand is nothing new and some (i.e., Italy, Japan, France) have been showing declining consumption since at least 1980!

 

5-consumption comparison2013 oil consumption vs. previous selected years – click to enlarge.

 

So, global production is up and advanced economies demand is in long term decline. The below chart highlights the fact that BRICS oil consumption is still growing – but the rate of BRICS oil consumption growth is in line with periods of global recession?

 

6-BRICs consumptionBRICS oil consumption (2014 estimated).

 

A quick snapshot of global production increases (y/y) vs. BRICS (y/y) consumption increases below. BRICS demand has been the driver for greater global production – until now?

 

7-production and consumption increaseGlobal production growth vs. BRICS consumption growth (source EIA).

 

The next chart shows the same global production change (y/y) as above but highlights China’s oil consumption change (y/y).  China’s $21 trillion quadrupling of its credit bubble from ’07 til now has been driven by real estate, but in the last year, China’s real estate prices have fallen and mortgage driven credit is slowing with the leaking bubble.  Could China’s economy be looking at an outright contraction in oil consumption in ’15?

 

8-global change vs. China consumptionGlobal production (y/y) vs. China’s consumption (y/y) (source, EIA).

 

The above charts clearly disagree with the narrative that equity and real estate markets have any linkage with the economy’s present or future health.  The above charts clearly indicate global advanced economy plus developing economy demand is waning at a pace typically seen in recessionary periods.

 

Monuments to Easy Money

The chart below is a reminder real estate but particularly equity markets are currently off in their own world and not supported by growing employment, wages, or savings…employment and slow growing wages seem to agree with oil.  Stocks and real estate are simply monuments to perpetually “cheaper” money.

 

9-US bubblesUS: asset bubbles grow, wages keep stagnating (employment data source: US Bureau of Labor Statistics; salary/wages source: US BEA; real estate data source: Federal Reserve System, Z.1 Financial Accounts; equities data source: Wilshire Associates) – click to enlarge.

 

Equities are supported by cheap money encouraging massive corporate buybacks and very favorable corporate taxation, as previously discussed here.

In direct opposition to equity markets are decelerating US population and jobs growth, declining full time jobs (replaced with part time jobs), ramping debt and unfunded liabilities growing far faster than both economic activity and tax revenues to pay for all of it.

 

10-US economic dataAssorted US economic data (total debt source: 2013 OASDI and Medicare Trustees’ Reports [p. 183]; population source: OECD; employment data source: US Bureau of Labor Statistics; HHNW source: Federal Reserve System, Z.1 Financial Accounts; wages, GDP, & taxes source: US BEA) – click to enlarge.

 

But who should you believe … record stock market valuations and consensus spouting, highly paid economists who tell you all as is well, or oil prices, negative economic indicators, and your own eyes that this is just one more artificial boom desperately trying to run from the inevitable bust?

 

Charts by Chris Hamilton

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • The Gold Sector Remains at an Interesting Juncture
      Technical Divergence Successfully Maintained In an update on gold and gold stocks in mid June, we pointed out that a number of interesting divergences had emerged which traditionally represent a heads-up indicating a trend change is close (see: Divergences Emerge for the details). We did so after a big down day in the gold price, which actually helped set up the bullish divergence; this may have felt counter-intuitive, but these set-ups always do. Consider now the updated chart below...
  • Confronting the Dragon with Peter Navarro
      Of No Real Use A young man might go to business school believing he is obtaining some sort of academic training that will enable him to make a comfortable living.  His degree may gain him entry into a large corporation, where he can work his way up to a good income.  This may even put him on the fast track to what he envisions as success.   Don't knock it: Being useless can lead to unexpected career opportunities... [PT]   But his academic training likely won't...
  • Trouble in Paradise
      Impressive Zeal for Faded Ideals Uncompromising independence, rugged individualism, and limitless personal freedom were once essential to the American character.  According to popular American folklore, they still are.  We have some reservations.   Rugged individualists suffer mid-life identity crisis. [PT]   The principles that gave rise to the American character died long ago.  Freedom.  Liberty.  Independence.  Limited representative government. Sound...
  • Gold – Macroeconomic Fundamentals Improve
      A Beginning Shift in Gold Fundamentals A previously outright bearish fundamental backdrop for gold has recently become slightly more favorable. Ironically, the arrival of this somewhat more favorable situation was greeted by a pullback in physical demand and a decline in the gold price, after both had defied bearish fundamentals for many months by remaining stubbornly firm.   The eternal popularity contest...   The list of gold fundamentals that have improved is...
  • The United States of Terror
      Bombs Away! Two recent articles* have again demonstrated that the greatest “terrorist” entity on earth are not the bogymen – Russia, China, Iran, North Korea – so often portrayed by Western presstitutes and the American government, but the United States itself!   This is an old cartoon, but still a good one. It perfectly describes the trigger-happy Western political class and the depth of its “thinking”. By happenstance we recently reviewed the Libya intervention...
  • Capitulation and Currency Pain - Precious Metals Supply and Demand
      Waving the White Flag The price of gold rose two bucks last week, though the price of silver fell 10 cents. We have seen several analyses recently predicting big price drops, in one case by at least $500 in gold by the end of the year. Is this what capitulation looks like? It’s said they don’t ring a bell at the top, but they don’t ring a bell at the bottom either.   The give-up moment arrives... [PT]   We have also seen technical analysis arguing that...
  • Maurice Jackson Interviews Rick Rule – Investing in Natural Resources
      Contrarian Investment Opportunities in Natural Resources Maurice Jackson of Proven and Probable has recently interviewed Sprott U.S. Holdings CEO Rick Rule, a well known specialist and “old hand” in the natural resource space. This is quite a wide-ranging and interesting interview, so we decided to present it to our readers. Below you find a summary and our comments on the main topics discussed, a video/podcast of the interview,  as well as a download link to a PDF file of the...
  • The True Sport of MAGA
      Chest Bumps One of the more extraordinary things that investors have seen in living memory is unfolding at this precise moment. This goes for business leaders, money managers, veteran Wall Streeters, value investors, 401(k) holders, momentum traders, FX guys, gold bugs, technical gurus, chartists, pork belly speculators, quants, astrologists, Larry Summers, put option sellers, dweebs and geeks, millennial index fund enthusiasts, and everyone in between.   Pork belly speculators...
  • Black Holes for Capital - Precious Metals Supply and Demand
      Race to the Bottom Last week the price of gold fell $17, and that of silver $0.30. Why? We can tell you about the fundamentals. We can show charts of the basis. But we can’t get into the heads of the sellers.   Other people's fiat: in the global race to the bottom, it was recently the turn of emerging market currencies to tank. [PT]   We can say that in the mainstream view, the dollar is rising. The dollar, in their view, is not measured in gold but in rupees in...
  • US Money Supply and Fed Credit – the Liquidity Drain Becomes Serious
      US Money Supply Growth Stalls Our good friend Michael Pollaro, who keeps a close eye on global “Austrian” money supply measures and their components, has recently provided us with a very interesting update concerning two particular drivers of money supply growth. But first, here is a chart of our latest update of the y/y growth rate of the US broad true money supply aggregate TMS-2 until the end of June 2018 with a 12-month moving average.   US TMS-2: y/y growth rate with...

Support Acting Man

Item Guides

j9TJzzN

The Review Insider

Dog Blow

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

Mish Talk

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com