EIA Weekly Report: What's getting missed

[dan_s]

Digging into the weekly EIA report here are a few things that jump out at me:

1. U.S. oil production has stopped growing
> The last week of December, 2017 U.S. crude oil production was estimated by EIA to be 9.8 million barrels per day.
> EIA reported steady growth during the first half of 2018 and they said U.S. production was 10.9 million BOPD in the last week of June, 2018
> Now EIA is reporting that U.S. production has been virtually flat for the last two month. EIA said today that U.S. oil production was 11.0 million BOPD the last week of August, 2018.

State reports show that EIA was overstating U.S. oil production by quite a lot in the 2nd quarter, so maybe the flat production in July and August is just EIA's way of correcting their models without admitting how bad they are.

Just remember that everything in the EIA weekly reports is a Wild Ass Guess (WAG) based on equations. They have no way of knowing what U.S. oil production was at any point in time until the state reports come out 90 days later. There are now over a million oil & gas wells in the United States and EIA does not have gauges on any of them.

2. Days of Supply remain VERY LOW:
22.6 days for crude oil (down week to week)
24.3 days for gasoline (down week to week)
22.4 days for jet fuel (up week to week, but dangerously low level)
31.8 days for distillates (up week to week, but much lower if you consider that other nations rely heavily on imports of diesel and fuel oil from the U.S.)

Link to the EIA's detailed report: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm

I realize it looks like a bunch of numbers, but "The Devil is in the Details". Plus, oil trades on the global market and supply/demand is very tight.

The sharp drop in oil prices the last two days is a quick reversal from earlier in the week when prices jumped, and DrillingInfo's Bernadette Johnson believes the main reason for today’s drop "is a correction after prices rose ahead of Hurricane Gordon. The storm was priced in on Monday and Tuesday, but then when the storm changed course prices came back down a bit.”