Jim Letourneau's Blog

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World Natural Oil Decline Rate is 9.1%

The Financial Times is reporting on a draft copy of the International Energy Agency and the news is long term bullish for oil.

Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows.

Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times.

With investment this decline rate can be slowed, but not reversed. In spite of project cutbacks, I haven't heard of any major oil patch layoffs and I doubt there will be very many.

If you liked oil at $140 you should be LOVING it with a 6 handle. As Bruce Springsteen says:

Someday we'll look back on this and it will all seem funny.