U.S. Oil Production
Posted: Mon Jan 09, 2017 6:52 pm
Tom Petrie on the Global Oil Market: http://www.oilandgas360.com/oil-prices- ... rig-count/
U.S. Oil Production has increased off the low, but not enough to have an impact on the global oil market in 2017.
According to the EIA website (see: http://www.eia.gov/dnav/pet/hist/LeafHa ... RFPUS2&f=W )
> U.S. oil production peaked at 9,610,000 Bbls per day the week ending 6/5/2015.
> It declined to 8,428,000 Bbls per day during the week ending 7/1/2016.
> Upstream companies then started completing more DUC wells, taking production up to 8,770,000 Bbls per day for the week ending 12/30/2016.
It is very important to understand that the 342,000 Bbl per day increase from July 1 to December 30 was because of increased well completions, not an increase in the active rig count.
I do think U.S. oil production will level off in Q1, primarily because weather does have an impact on well completions, and then rise through the year. My SWAG is that U.S. oil production is approximately 9,200,000 Bbls per day by the end of 2017.
Raymond James in their January 3, 2017 Energy Industry Brief forecast U.S. production growth of 350,000 BOPD in 2017 and 1,200,000 BOPD in 2018:
"Our oil model shows that global oil inventories have been drawing since 2Q16. The draws are set to increase in 2017, averaging 900,000 bpd for the full year. Inclusive of the partial implementation we are assuming for the OPEC cut, we project draws of 1.1 million bpd in 1Q and a similar 1.0 million bpd in 2Q. Even if we assume OPEC supply recovers to near maximum capacity in 2H17, our model still shows a draw of 500,000 bpd in 3Q and 0.9 million bpd in 4Q. How is it that inventories still draw so much even after the OPEC cut expires? First, we forecast global demand growth of 1.2 million bpd in 2017 (this is well below the levels of 2015, 2016, and IEA forecasts). Second, non-OPEC, ex-U.S. supply looks like it will flatline in 2017/18 as the best-case scenario. In other words, our bias would be for non-OPEC supply outside of the U.S. to decline a bit. Third, U.S. production should post a modest ~350,000 bpd recovery in 2017, rising to a robust 1.2 million bpd surge in 2018."
U.S. Oil Production has increased off the low, but not enough to have an impact on the global oil market in 2017.
According to the EIA website (see: http://www.eia.gov/dnav/pet/hist/LeafHa ... RFPUS2&f=W )
> U.S. oil production peaked at 9,610,000 Bbls per day the week ending 6/5/2015.
> It declined to 8,428,000 Bbls per day during the week ending 7/1/2016.
> Upstream companies then started completing more DUC wells, taking production up to 8,770,000 Bbls per day for the week ending 12/30/2016.
It is very important to understand that the 342,000 Bbl per day increase from July 1 to December 30 was because of increased well completions, not an increase in the active rig count.
I do think U.S. oil production will level off in Q1, primarily because weather does have an impact on well completions, and then rise through the year. My SWAG is that U.S. oil production is approximately 9,200,000 Bbls per day by the end of 2017.
Raymond James in their January 3, 2017 Energy Industry Brief forecast U.S. production growth of 350,000 BOPD in 2017 and 1,200,000 BOPD in 2018:
"Our oil model shows that global oil inventories have been drawing since 2Q16. The draws are set to increase in 2017, averaging 900,000 bpd for the full year. Inclusive of the partial implementation we are assuming for the OPEC cut, we project draws of 1.1 million bpd in 1Q and a similar 1.0 million bpd in 2Q. Even if we assume OPEC supply recovers to near maximum capacity in 2H17, our model still shows a draw of 500,000 bpd in 3Q and 0.9 million bpd in 4Q. How is it that inventories still draw so much even after the OPEC cut expires? First, we forecast global demand growth of 1.2 million bpd in 2017 (this is well below the levels of 2015, 2016, and IEA forecasts). Second, non-OPEC, ex-U.S. supply looks like it will flatline in 2017/18 as the best-case scenario. In other words, our bias would be for non-OPEC supply outside of the U.S. to decline a bit. Third, U.S. production should post a modest ~350,000 bpd recovery in 2017, rising to a robust 1.2 million bpd surge in 2018."