Neil King reports from Washington, D.C.:

Deutsche Bank’s oil team is jumping into the swirling peak-oil debate, arguing that steep decline rates in existing oil fields will make it all but impossible for producers to break beyond a 100
million-barrel-a-day ceiling.

Peak or Plateau? (Wikipedia)

Their analysis puts the bank, long a big player in the oil patch, among a growing chorus who see the world hitting a production plateau of 100 million barrels a day within seven or eight years. The world is now consuming around 87 million barrels a day, but most institutional forecasts say that demand will top 100 million barrels a day by 2015. The bank says that supply constraints could push the price of oil to $150 a barrel by 2010. The big question will be whether prices at that level will finally lead to a sharp break in demand, something that $100-a-barrel oil has yet to do. Deutsche Bank bases its supply-side gloom on how much harder it is for oil producers to make up the difference for slumping production in aging fields. For the last 36 years the world has managed to add, on average, around 4.2 million barrels a day to annual supplies. But with a conservative 5% decline rate in existing fields, that figure will have to rise to over 7 million barrels a day to get to 100 million barrels a day—a level “that has never been achieved,” according to the report.

But Deutsche Bank is adamant that it is not joining the peak-oil crowd, which the bank slams as being in the “stopped-clock school of analysis.” “We’re not in the crowd that we’re all doomed,
we’ve had it,” says Deutsche analyst Paul Sarkey, one of the report’s authors. “We can handle this.”

Instead, the growing school of supply plateauists — which already includes the CEOs of Total and ConocoPhillips — has justgotten one bank larger.

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