Energy Prospectus

Hamm Says The EIA Is Overestimating Oil Production. The Oil Price.

The Energy Information Administration is overestimating U.S. crude oil production, Continental Resource’s chief executive Harold Hamm said today in an interview with Fox Business. Hamm was notably the only shale oil major executive who warned against the too-quick boosting of shale oil production after the OPEC-non-OPEC output cut deal from the end of last year. “We are showing about 9.35 million barrels, 9.4 million barrels by the year’s end for the U.S. In comparison their prediction was 9.8-9.9, close to 10 million barrels,” Hamm also told Fox Business’ Maria Bartiromo. The EIA’s September STEO also pegged year-end oil production in the U.S. at 9.3 million bpd, and average 2018 production at 9.8 million bpd.
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I have been telling you this for months in my podcasts. The EIA's weekly reports have shown U.S. oil production to be much higher than actuals since March.

Lower U.S. Oil Prices Are a Shot in the Arm for Crude Exports. Wall Street Journal.

U.S. oil is trading at the biggest discount to the global price in two years, helping extend a boom in exports of crude from American shale fields to refiners in Europe and Asia. After Hurricane Harvey hammered the Gulf Coast last month, the price of Nymex crude sank to as much as $6.30 a barrel below its European counterpart, Brent—the widest gap since August 2015. Harvey has passed, but analysts say the storm will reshape global crude flows for months. The difference between U.S. and international crude benchmarks, currently $5.88, is key in determining when it’s profitable to ship oil from U.S. ports to places overseas. A difference of at least $4 makes it attractive for a refiner in countries like China or South Korea to buy oil from shale producers in Texas and North Dakota, said R.T. Dukes, an oil expert with consulting firm Wood Mackenzie. “Get to a $4 spread and you can take it anywhere in the world," he said.

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When Hurricane Maria gets out of the way, we should seen exports of light oil from the U.S. increase. This should push WTI's price toward the Brent price.