Peak Oil Review: A Midweek Update – 1 Sept 2016

The following are developments so far this week which could affect the future price or supply of oil:
 
Oil prices fell 3 percent on Wednesday, paring their big gains for August after EIA data showed a surprise weekly build of 2.3 million barrels in US crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline. Total commercial petroleum inventories increased by 4.5 million barrels last week. At the close NY futures were at $44.70 and barrel and London futures were at $47.04.
 
Wood Mackenzie says the oil industry only discovered about 2.7 billion barrels of new supply in 2015, a tiny fraction of the annual average for the past fifty years, and the least amount of oil discovered since 1947.  2016 could be even worse. An eventual oil price spike seems inevitable.
 
Iraq pledged to support an OPEC freeze deal at the Algiers meeting in late September. This is a reversal of its position that the country needs to increase production.
 
In September, Iran will send out invitations to energy companies to express interest in bidding on the first contracts in the post-sanctions era. The international oil companies will have until October to submit bids under the long-awaited new contract model as Tehran seeks billions of dollars to boost output after years of international sanctions.
 
World population will reach 9.9 billion in 2050, increasing by 33 percent from an estimated 7.4 billion now, the latest report from the Population Reference Bureau has predicted.
 
Iraq’s prime minister agreed with the semi-autonomous Kurdistan Regional Government to start talks about crude output from northern regions that have been bypassing the central government to export oil.
 
Libyan forces said they captured a residential neighborhood in central Sirte from the Islamic State on Monday, leaving just one district of the city still occupied by the militants.
 
The Niger Delta Avengers, which has claimed responsibility for a series of attacks on oil and gas facilities in the southern Niger Delta energy hub in the last few months, said on Monday that it had halted hostilities.
 
Royal Dutch Shell agreed to sell its Brutus/Glider operation in the Gulf of Mexico for $425 million as the company seeks to recover from the lowest profits in more than a decade.
 
Oil production in China likely peaked last year at around 4.3 million barrels a day, according to new data and interviews with industry executives. The development has significant implications globally, including the potential for higher crude prices over time as China steps up imports to meet rising demand at home.
 
Blackstone Group announced its decision to spend $1 billion on Permian oil development in a partnership with a Fort Worth-based affiliate.  The Permian Basin is one of the last profitable areas to still drill with sub-$50 oil. The rebound in the rig count in the U.S. is largely concentrated in the Permian. The West Texas shale basin has captured two-thirds of the 90 oil rigs that have been added since the lows hit in May.
 
Colorado drillers dodged $10 billion-a-year threat to output as citizen proposals to control fracking didn’t get enough signatures.