US Oil Production hits a bump in the road
Posted: Thu Feb 01, 2024 9:46 am
From HFI Research
I don't know how many people realize how significant this EIA PSM/914 report was (just published for November). In our real-time US oil production tracking dataset, November 2023 was supposed to be at an all-time high. While headline figures did point to a new "record", the underlying balance suggested otherwise.
With the adjustment coming in at -315k b/d, the old methodology of using production + adjustment suggests that real US oil production was 12.993 million b/d.
Even if you factor in transfers to crude oil supply, US total supplies came in at 13.527 million b/d, which is nothing higher than the previous months. As you can see in our trued-up US oil production chart below, transfers to crude oil supply were first introduced in June 2023, and since then, we have been able to "true-up" US crude production. The flatline signals that despite the capex ramp-up from private producers, the production gains have been a mirage. Headline figures outperform, but underlying figures suggest otherwise.
Going forward, this is going to present a surprise to the downside for 2024 balances. While IEA and the rest are using ~13.3 million b/d for US crude production exit in 2023, the real figure is closer to ~13 million b/d. And as Q1 continues, the implied balance so far is suggesting even lower US crude production.
I don't know how many people realize how significant this EIA PSM/914 report was (just published for November). In our real-time US oil production tracking dataset, November 2023 was supposed to be at an all-time high. While headline figures did point to a new "record", the underlying balance suggested otherwise.
With the adjustment coming in at -315k b/d, the old methodology of using production + adjustment suggests that real US oil production was 12.993 million b/d.
Even if you factor in transfers to crude oil supply, US total supplies came in at 13.527 million b/d, which is nothing higher than the previous months. As you can see in our trued-up US oil production chart below, transfers to crude oil supply were first introduced in June 2023, and since then, we have been able to "true-up" US crude production. The flatline signals that despite the capex ramp-up from private producers, the production gains have been a mirage. Headline figures outperform, but underlying figures suggest otherwise.
Going forward, this is going to present a surprise to the downside for 2024 balances. While IEA and the rest are using ~13.3 million b/d for US crude production exit in 2023, the real figure is closer to ~13 million b/d. And as Q1 continues, the implied balance so far is suggesting even lower US crude production.