Energy Prospectus

The actual U.S. oil production for July is now available on the EIA website. Actual production is based on state reports and EIA weekly production numbers reported each Wednesday are based on flawed formulas. The EIA clearly says that their weekly numbers are "estimates" but the oil traders take them as gospel truth. Since February, EIA has been over-estimating U.S. crude oil production by a fairly large number.

Barrels of U.S. crude oil production per day

----------Per weekly
---------- Reports - Actuals = Difference
2017
Jan: 8,948,800 - 8,851,000 = 97,800 BOPD < Amount that EIA over-reported U.S. crude oil production during the month
Feb: 9,024,500 - 9,070,000 = -45,500 BOPD
Mar: 9,146,000 - 9,131,000 = 15,000 BOPD
Apr: 9,261,250 - 9,120,000 = 141,000 BOPD
May: 9,319,800 - 9,161,000 = 158,800 BOPD
Jun: 9,317,000 - 9,097,000 = 220,000 BOPD
Jul: 9,416,500 - 9,238,000 = 178,500 BOPD

Note that U.S. oil production was fairly flat February to June despite a rising U.S. active rig count.

U.S. oil production has increased since OPEC announced their production cuts, but it still is not quite back to the peak production set mid-2015. All the predictions of U.S. production ramping up to 10 million or even 12 million barrels per day need to be revised. Unless the price of WTI oil goes to $65/bbl soon, my prediction is that U.S. crude oil production will not come close to 10 million bpd in 2018.

To check the numbers above yourself, go here: https://www.eia.gov/dnav/pet/hist/LeafH ... RFPUS1&f=M

COLD HARD FACT: The United States cannot produce enough oil to keep up with global demand. Heck, we cannot produce enough to meet our own demand.

U.S. crude oil production was 8,691,000 barrels per day in July, 2016

So.... U.S. oil production increased by 547,000 barrels per day during the 12 months ending 7/31/2017.

Does this look like something that OPEC should be afraid of in a world were demand for oil is going up 1,600,000 barrels per day this year?

COLD HARD FACT: The more U.S. oil is produced from high decline rate wells in shale and other tight rock, the harder it will be for U.S. oil production to grow. The math just does not work. Horizontal wells in tight formations decline by 30% to 60% in the first year.