U.S. Oil Production Decline Rate
Posted: Fri Jun 24, 2016 5:04 pm
Production > Barrels of Oil per day per the EIA website
9,604,000 for the week ending 6/19/15
8,677,000 for the week ending 6/17/16
17,826 BOPD decline per week for 52 weeks
9,038,000 for the week ending 3/18/16
8,677,000 for the week ending 6/17/16
27,769 BOPD decline per week for 13 weeks
For the week ending 6/17/16 U.S. production declined by 39,000 BOPD.
As you can see, the rate of decline is accelerating. So, if U.S. oil production declines by 40,000 BOPD week after weed for the next 28 weeks, U.S. production will drop another 1,120,000 BOPD by December 31, 2016. There are several large offshore production platforms coming on this summer and the upstream companies may complete more wells (DUC), but it is looking more and more like U.S. oil production will be less than 8,000,000 BOPD by year-end.
U.S. refineries consume about 16,600,000 million barrels of crude oil per day. Our total refining capacity is 18,300,000 barrels per day, but we never run at full capacity.
With demand for refined products going up by 1.2 to 1.5 million barrels per day each year AND the U.S. becoming more and more dependent on imports of crude oil, doesn't it make sense that refiners would want to keep more crude oil (their raw material) in inventory?
My point here is that we keep hearing that there is a high level of oil in storage and that it must be worked off before oil prices move much higher. I think that is irrational because the higher level of storage is justified by the higher demand for refined products AND the fact that U.S. refiners are more dependent on imports from places that are more at risk.
9,604,000 for the week ending 6/19/15
8,677,000 for the week ending 6/17/16
17,826 BOPD decline per week for 52 weeks
9,038,000 for the week ending 3/18/16
8,677,000 for the week ending 6/17/16
27,769 BOPD decline per week for 13 weeks
For the week ending 6/17/16 U.S. production declined by 39,000 BOPD.
As you can see, the rate of decline is accelerating. So, if U.S. oil production declines by 40,000 BOPD week after weed for the next 28 weeks, U.S. production will drop another 1,120,000 BOPD by December 31, 2016. There are several large offshore production platforms coming on this summer and the upstream companies may complete more wells (DUC), but it is looking more and more like U.S. oil production will be less than 8,000,000 BOPD by year-end.
U.S. refineries consume about 16,600,000 million barrels of crude oil per day. Our total refining capacity is 18,300,000 barrels per day, but we never run at full capacity.
With demand for refined products going up by 1.2 to 1.5 million barrels per day each year AND the U.S. becoming more and more dependent on imports of crude oil, doesn't it make sense that refiners would want to keep more crude oil (their raw material) in inventory?
My point here is that we keep hearing that there is a high level of oil in storage and that it must be worked off before oil prices move much higher. I think that is irrational because the higher level of storage is justified by the higher demand for refined products AND the fact that U.S. refiners are more dependent on imports from places that are more at risk.