HSBC produced an interesting report on oil production decline rates and their implications for the long-term oil supply outlook – Global oil supply: Will mature field declines drive the next supply crunch? . 1. The oil market may be oversupplied at present, but we see it returning to balance in 2017e2. By that stage, effective spare capacity could shrink to just 1% of global supply/demand of 96mbd, leaving the market far more susceptible to disruptions than has been the case in recent years 3. Oil demand is still growing by ~1mbd every year, and no central scenarios that we recently assessed see oil demand peaking before 2040 4. 81% of world liquids production is already in decline (excluding future redevelopments) 5. In our view a sensible range for average decline rate on post-peak production is 5-7%, equivalent to around 3-4.5mbd of lost production every year 6. By 2040, this […]