Mexico's Cantarell Oil Field in Serious Decline

The Wall Street Journal has a story (subscription required) on how quickly production at Mexico's Cantarell oil field is declining. Output at Cantarell oil field -- responsible for about six of every 10 barrels Mexico produces -- fell to 1.74 million barrels a day in June from 1.92 barrels in January, according to figures released by Mexico's Energy Ministry.

Why should we care?

• Mexico is typically among the top-three suppliers of crude oil to the U.S.
• Last year Mexico supplied roughly 8% of the 20.7 million barrels a day consumed in the U.S.
• An internal oil-company report that suggested earlier this year the field's output could fall by nearly 75% by the end of 2008.

Output at Cantarell oil field -- responsible for about six of every 10 barrels Mexico produces -- fell to 1.74 million barrels a day in June from 1.92 barrels in January. Thanks mostly to the decline at Cantarell, Mexico's overall crude output fell 4% in June compared with a year ago.

If you think gasoline is expensive now, just wait until Cantarell goes into catastrophic decline.

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