Production from Mexico’s Cantarell oil field is falling quickly.
From Saturday’s Wall Street Journal ($$$):
The virtual collapse at Cantarell– the world’s second-biggest oil field in terms of output at the start of last year– is unfolding much faster than projections from Mexico’s state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell’s daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January, according to figures from the Mexican Energy Ministry.
Mexico made up for some of the field’s decline. Mexico’s overall oil output fell to just below three million barrels a day in December, down from almost 3.4 million barrels at the start of the year. It marked Mexico’s lowest rate of oil output since 2000….
The field’s decline is expected to continue, if not worsen, this year, according to most estimates.
Mexico had been the world’s fifth biggest oil producer in 2005. When Ghawar (the world’s biggest field, accounting for half of Saudi Arabia’s total oil production capacity) follows Cantarell, people will take notice.
And while I’m mentioning the Saudis, how can it be that both (1) “the present level of oil prices is adequate in our view,” as outgoing U.S. Ambassador Turki Al-Faisal declared on Monday, and (2) the Saudis are continually implementing even bigger cuts in production, as we learned on Tuesday?
If Mexico can’t, Saudi Arabia won’t, and the U.S. and China remain thirsty, I still don’t see how oil below $50 a barrel could hold.