Well, I guess we are officially at the peak.
A top Saudi bank expects fall in oil production
Reuters via Gulf News
Original title: "Government spending to boost Saudi Arabia GDP"
Riyadh: Economic growth in Saudi Arabia, the largest Gulf Arab economy, could accelerate this year on the back of a projected rise in government spending, Riyadh Bank said in a research report.
The kingdom's fifth largest bank by market value expects gross domestic product to grow 4.3 per cent in 2007 compared to 4.2 per cent in 2006.
...Saudi oil production is expected to fall from an average 9.12 million barrels per day in 2006 to 8.44 million bpd in 2007. "For 2007 ... we forecast oil prices to rise/fall by $3 per barrel," it said.
8.44m: Projected oil output in 2007 (in bpd)
(1 April 2007)
Contributor Jeffrey J. Brown writes:
One of Saudi Arabia’s top banks apparently does not expect any increase in oil production in 2007. They are predicting an average production rate of 8.44 mbpd for 2007, versus a 9.12 mbpd production rate in 2006, and 9.55 mbpd for 2005. This is a 7.5% year over year decline rate in average annual production, which if continued, suggests a 50% decline in average annual production in 10 years. However, net oil exports are falling much faster.
Note that the year over year decline in Saudi crude oil production from 2005 to 2006, was only 4.2%.
To summarize, one of the largest Saudi banks is predicting that the year over year decline in average annual Saudi crude oil production will increase from 4.2% in 2006 to 7.5% in 2007. Note that year over year declines, on a month to onth basis, are usually larger than year over year declines in average annual production.
Also note the continued negative effect on net oil exports of a continued rapid increase in GDP--as oil prices remain high, or go higher, even as oil production falls.
UPDATE: Stuart Staniford at The Oil Drum has a short article up on Further Saudia Arabia Discussions.
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