U.S. crude oil production down in August
Posted: Sat Sep 16, 2017 8:51 am
Per the EIA: "US crude oil production is estimated to have averaged 9.2 million b/d in August, down 40,000 b/d from the July average. Crude oil production in the Gulf of Mexico fell to a monthly average of 1.6 million b/d in August, down 70,000 b/d from the July level, due to disruptions. At this writing, many oil production platforms in the Gulf of Mexico had returned to operations."
As I have been telling you in my weekly podcasts for several months, EIA's weekly estimates of U.S. oil production have been overstated since March. The overstatements are caused by errors in the formulas EIA uses to estimate weekly production. Their formulas give too much weight to the trend, so when we had a big increase in production in Q4 2016 and Q1 2017 the formulas caused overstated weekly estimates in Q2 by more than 200,000 barrels per day. Below are the actual crude oil production volumes by month.
Jan = 8,858,000 BOPD
Feb = 9,075,000
Mar = 9,107,000
Apr = 9,083,000
May = 9,169,000
Jun = 9,097,000 < EIA's weekly reports (4 weeks ending 6/30/2017) said U.S. oil production was 9,317,000 BOPD. An overstatement of 220,000 BOPD.
Many Wall Street analysts fell into the trap. You may recall seeing estimates that U.S. crude oil production would zoom to 10,000,000 BOPD in 2017 and over 12,000,000 BOPD in 2018. The 12 MMBOPD estimate was ridiculous and the firm that made that forecast should be ashamed of themselves. It totally ignored the FACT that we do not have the infrastructure needed to move that much oil.
U.S. oil production MAY reach 10,000,000 BOPD in 2017, but it will only happen if oil prices move into the $55 to $60 range. I doubt we see U.S. oil production come anywhere close to 12,000,000 BOPD this decade and this country will NEVER be fully energy independent.
As I have been telling you in my weekly podcasts for several months, EIA's weekly estimates of U.S. oil production have been overstated since March. The overstatements are caused by errors in the formulas EIA uses to estimate weekly production. Their formulas give too much weight to the trend, so when we had a big increase in production in Q4 2016 and Q1 2017 the formulas caused overstated weekly estimates in Q2 by more than 200,000 barrels per day. Below are the actual crude oil production volumes by month.
Jan = 8,858,000 BOPD
Feb = 9,075,000
Mar = 9,107,000
Apr = 9,083,000
May = 9,169,000
Jun = 9,097,000 < EIA's weekly reports (4 weeks ending 6/30/2017) said U.S. oil production was 9,317,000 BOPD. An overstatement of 220,000 BOPD.
Many Wall Street analysts fell into the trap. You may recall seeing estimates that U.S. crude oil production would zoom to 10,000,000 BOPD in 2017 and over 12,000,000 BOPD in 2018. The 12 MMBOPD estimate was ridiculous and the firm that made that forecast should be ashamed of themselves. It totally ignored the FACT that we do not have the infrastructure needed to move that much oil.
U.S. oil production MAY reach 10,000,000 BOPD in 2017, but it will only happen if oil prices move into the $55 to $60 range. I doubt we see U.S. oil production come anywhere close to 12,000,000 BOPD this decade and this country will NEVER be fully energy independent.