On day two of the Oil & Money conference in London, Christophe de Margerie, Total’s chief executive, dropped something of a bombshell when he said he saw predictions that world oil output could rise to 100m barrels per day as the "optimistic" case.
Given that the International Energy Agency, and other official bodies are predicting a rise to 115m b/d or more, that is a strikingly low number.
As with the IEA’s own concerns about production, the issue is not so much the geology of oil reserves – the "below ground" factors, as they are known – although they play a part in Mr de Margerie’s story. More important, however, are the "above ground" factors: the lack of capacity in the industry to develop resources sufficiently quickly, and the geo-political problems that have hit production in countries as diverse as Nigeria, Venezuela, and Iraq.
What that means for prices, Mr de Margerie wouldn’t say. Predicting oil prices is a mug’s game, and Mr de Margerie has been around too long to get involved in it. As Albert Helmig, president of Grey House, a consultancy, put it: "The only thing I can guarantee is that the price will be different tomorrow. [There is] a lot of noise, little fact."
That said, however, it is clear that Mr de Margerie’s view of supply potential implies that prices will oscillate around a much higher central point than in the past.