Art Berman reports on his blog the latest data from IEA. These data speak volumes about what has been happening in the oil markets during the past two years or so. The whole thing seems to have gone out of control, with everyone pumping as much as possible, worrying only about harming competitors and without too much concern about the overall disaster caused by overproduction. The excess has stimulated demand, but only weakly. The result has been the collapse of the oil price, that we are still seeing today.
It seems, now, that the market is slowly redressing the unbalance. Demand is growing, and supply seems to have peaked in July 2015. In a few months, we may go back to a situation where demand matches supply, at this point we'll see prices rising again. We'll likely see production going down, and the whole system regaining some kind of balance; at least for a while. For sure, the main element in the readjustment is the decline in the production from shales in the US (image from Ron Patterson).
Is the July peak "the" peak for all combustible liquids? We can't say yet, what we can say is that the period of oil glut has done a tremendous damage to the industry. Perhaps, we are starting right now the terminal decline of the world's oil industry; but we still have to wait to be sure. Americans, it seems, love boom and bust cycles and, if prices go up again, they might want to pour again money into the shale industry. The only sure thing is that fossil fuels must go, sooner or later.