EIA - 941 Report shows oil prod decline from Nov to Dec
Posted: Fri Feb 26, 2021 12:42 pm
As I predicted in my recent podcasts, the rebound in U.S. crude oil production from the active Gulf of Mexico hurricane season peaked in November, 2020 at 11,121,000 bpd. There was also an increase in completing DUC wells (happens each year) but that ended mid-December. DUC well inventories are almost back to normal, which means that the number of wells being drilled is about the same as the number of wells being completed.
From the all-time peak of 12,860,000 bpd in November, 2019, U.S. production is down 1,797,000 bpd and I expect it to keep declining.
EIA's monthly 941 report is our first look at actual U.S. oil production for December, 2020.
Find report here: https://www.eia.gov/petroleum/production/pdf/table2.pdf
From November to December, U.S. oil production declined by 58,000 bpd to 11,063,000 bpd. It will continue to decline because we are not completing enough wells to hold production flat. There will be BIG drop from Jan to Feb because of the freeze offs last week that took over 4 million bpd offline for a few days. Some of those wells will take weeks to get back online. My guess is that U.S. production will rebound to 10.5 million bpd in March and then decline 50,000 to 100,000 per month until we have at least 500 rigs drilling for oil.
NONE of the upstream companies that I follow have announced a significant increase in their drilling programs and I do not expect much of an increase in the active rig count until the summer. All of the public companies are under pressure to generate free cash flow from operations. < Falling Supply + Rising Demand = Higher Oil Prices
From the all-time peak of 12,860,000 bpd in November, 2019, U.S. production is down 1,797,000 bpd and I expect it to keep declining.
EIA's monthly 941 report is our first look at actual U.S. oil production for December, 2020.
Find report here: https://www.eia.gov/petroleum/production/pdf/table2.pdf
From November to December, U.S. oil production declined by 58,000 bpd to 11,063,000 bpd. It will continue to decline because we are not completing enough wells to hold production flat. There will be BIG drop from Jan to Feb because of the freeze offs last week that took over 4 million bpd offline for a few days. Some of those wells will take weeks to get back online. My guess is that U.S. production will rebound to 10.5 million bpd in March and then decline 50,000 to 100,000 per month until we have at least 500 rigs drilling for oil.
NONE of the upstream companies that I follow have announced a significant increase in their drilling programs and I do not expect much of an increase in the active rig count until the summer. All of the public companies are under pressure to generate free cash flow from operations. < Falling Supply + Rising Demand = Higher Oil Prices