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US Oil Production Sets New Modern Record Last Week
By EconMatters
EIA Report
I looked over the weekly Petroleum Inventory Report put out by the EIA today, and the biggest takeaway by far was that US Oil Production set a new modern era high at 9.566 Million Barrels per day. The last high in US Production occurred in March, and it appeared that the US Production numbers were getting slightly weaker, and maybe the top in US Production was in. But this past week Production really ramped back up with a blowout number, and if it wasn`t for a week in which imports were unusually low for the week, there would have been another huge build in Oil Inventories for the week.
Read: Oil Market Shell Games
Energy Storage Hubs
Refineries were operating near full capacity on the week cranking out a utilization rate just shy of 94%, which also helped avoid another weekly inventory build in oil supplies. However, Cushing Oklahoma and the Gulf Coast Region barely budged in reducing the oil inventory surplus at those two crucial storage hubs. Cushing Oklahoma still has 60 Million Barrels stuck in storage facilities, while the Gulf Coast has 242 Million Barrels awaiting refinery for end use.
Shale Industry
However, the noteworthy takeaway is that despite a large reduction in drilling rigs, and the lower prices of the last year US Oil Production is still going up, and not tapering off at all! So much for the Saudi and OPEC strategy of putting a dent in US Oil Production by not cutting production and hoping to gain market share for their oil by putting the Shale Industry out of business.
Annual Comparison
For example, a year ago US Oil Production was 8.472 Million Barrels per day, and now after a market share price war between OPEC and the US Producers, the US is producing a record level of Production, a new modern era record since the EIA began tracking this data in 1983 at 9.566 Million Barrels per day. This is an increase of over 1 Million Barrels per day in US Oil Production in a year`s time, and considering the decline in drilling rigs, this speaks volumes about the increased efficiencies taking place in a lower price and cost environment.
Market Reaction
The oil keeps coming out of the ground at record levels, and throw in OPEC`s record output, and it doesn`t bode well for oil prices the second half of the year once the summer driving season ends and we start the building season all over again in oil inventories! We really are at risk of both the Cushing and Gulf Coast storage hubs reaching their storage limits over the next year, and it will be interesting how the oil market deals with this reality.
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This doesn't seem like the Saudi's effort to crush US oil production.
This seems like economic warfare against the Russians, and possibly prep for conflict escalation with them.
The Chinese and Japanese are just happy recipients of the same cheap oil as they gear up for a pacific theatre distraction from their own printing and debt binges.
Just a thought from an old businessman:
What good is it to get a contract for $100,000 if it costs $101,000 to fulfill the contract?
Old used car lot joke: We buy high; we sell low; how we stay in business? We lucky.
The US still consumes around 18-20 million per day. Not exactly oil energy independent , which is a pipe dream. Some of the technology used to extract it relies on a decent supply of fresh water which is also being depleted at an alarming rate right now.
Again...REFINERS consume that much oil a day...but actual end users in the US do not. (When you can buy oil on the open market for a buck a barrel who wouldn't be?)
So no...the US does not consume in the form of actual distillates...I think that number has remained constant at around 7-8 million barrels of oil a day...which I do agree is no small number.
Been a great time to be a refiner for many years now as the price of natural gas has totally collapsed and pretty much stayed there.
I do agree a lot of A-380's are suddenly appearing in the USA. We're probably the only country in the world that can afford that aircraft actually.
Absolutely correct State production numbers show production peaked early this year. Only the EIA MODELS are still showing increase...surprise surprise the gubmint is falsifying data.... I'm shocked!
when country A (USA) has a currency printer that can print unlimited amounts to cover bad shale industry debt, and country B (Saud) has no such printer, then country B will lose - until country A's freshly printed currency is no longer accepted, which is still a long ways off - sorry Saud, you lose because of your stupidity in accepting phony fiat for your oil
actually the "real number" to watch is the drilled and unfracked bores....here in the bakken there are over 1000 unfracked bores. under current state law if the bore isn't completed within 1 year the well has to be capped. we'll see about that going forward.
WTF. 'missing oil', Yeah it's up alright, most of it is on the California beaches, the Gulf of Mexico, Alaskan coastline, and God only knows where else the shit is leaking. And as an afterbirth, with production so fucking gloriously "high", why has the damn price per gallon stealthly gone up I ask? Baaahh........
More oil leaks NATURALLY from the floor of the Gulf of Mexico AND the coast of California than any amount spilled on the beach. Try reading something scientific rather than the leftist propaganda your overlords spoon feed you. Oil equals freedom, cars that YOU drive equals freedom and both of those things must be controlled by the oligarchy lest they lose control and have to compete to stay on top. Why do you suppose there is an inheritance tax? Keeps the competition at bay!
Here's my scientific data winston, (where might be yours?) Wiki leaks; The Science and History of Oil Spills. You must have mistaken me for liberal bleeding heart tree hugger, NOT! Your
" more oil leaks naturally from the floor of the Gulf of Mexico and the coast of California than any amount spilled on the beach" is an ESTIMATE. Take a look at the REAL FACTS and then come back with a sensible rebuttal.
So if X amount of oil natuarlly leaks from the sea floor, and Y amount is spilled from man-made fuckups, then X + Y oil leaking/spilling into the ocean is OK?
Is that the logic?
Seems like we might want to know something of the relative sizes of X and Y and also about the impact of the concentrations of X and Y. . .
But that's just me.
no.
WAKE The F up.....
The Department of Energy reported yesterday that weekly US oil production rose to an all-time high.
Mike has been explaining to our clients the weekly US oil figures in the DOE report are generated by an econometric model vs survey readings from oil companies/producers. Mike believes crude production in the weekly DOE estimate is being overstated and ‘missing oil’ has largely increased from an already high number over the last 6 weeks.
Cornerstone Analytics
But that tiny hook at the end of the storage rise is what they are manipulating on, so line up for your "free" colonoscopy.....