Understanding oil production and oil consumption – step two


There are two primary classification of producers when it comes to crude Oil. OPEC and non OPEC. Total expected production for 2010 as per EIA is expected to range between 85 – 86.3 million barrels per day. EIA consumption estimate for 2010 is between 81 – 91.6 million barrels per day. US and OECD inventories stand at 3.79 billion barrels. Base line supply and demand numbers are at 85.6 million (supply) and 85.1 million (consumption) barrels per day for 2010 with an expected addition of .44 million barrels per day to existing stocks and inventory for 2010. To this mix add significant spare production capacity that exists on account of OPEC price cuts over the last 18 months, current quota compliance of under 60%, economic and political pressures at some of the producing countries and uncertainty about the global economic outlook and you can almost understand the bearish case for oil.