Oil Supply Economics

Publish date:

  Returning to the topic of energy of which we have discussed many times before, there was an interesting article in this week’s Nature journal. In the article, James Murray and David King argue that since 2005, oil production has reached an effective cap at around 75 million barrels of regular crude per day.  Production […]

 

Returning to the topic of energy of which we have discussed many times before, there was an interesting article in this week’s Nature journal.

In the article, James Murray and David King argue that since 2005, oil production has reached an effective cap at around 75 million barrels of regular crude per day.  Production over the past six years, they conclude, has increased little despite continued upward oil prices.

This they argue has occurred as the oil industry passed a transition point and moved from elastic supply curve economics to an inelastic supply curve economics (see chart).

Source: Nature, Vol 481, 26 Jan 2012

While global oil demand remains relatively weak today, with the International Energy Agency predicting global oil demand growth in 2012 of around 1.1 million barrels per day, that inelastic supply curve could yet push oil prices back up to record levels in the not too distant future.

 

1st February 2012

Related Posts

General

Honoring our Asian Pacific American Veterans

Paul Dailey
Date icon May 16, 2017

There are many ways you can show your appreciation. 

Community

OUTfront – 10 Year Anniversary

jens.loebbermann
Date icon February 9, 2017

Since its inception, OUTfront celebrates its decennial by doing what it does best: providing a...

Community

What is Veterans Day

Paul Dailey
Date icon November 9, 2016
cookies.

By continuing to navigate on this website, you accept the use of cookies.

For more information and to change the setting of cookies on your computer, please read our Privacy Policy.

Close

Close cookie information