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Oil Production Vital Statistics September 2017

Oil Production Vital Statistics September 2017

On around June 28th the price of WTI and Brent once again began to diverge and the spread now stands at over $7. The WTI – Brent spread was a feature of the high oil price era and its reappearance could be a bullish signal for the oil price. While WTI is trading sideways the Brent chart is bullish having decisively broken through resistance at $55. North American production has recovered from July 2016 lows to stand at 19.91 Mbpd in August 2017. OPEC remains largely compliant with the agreed production cuts but this is significantly undone by production increases of 230,000 bpd in Nigeria and 360,000 bpd in Libya (total +590,000 bpd since the October 2016 datum), who were not party to the OPEC deal. The recovery in North Sea Oil production that began in October 2012 is now faltering and this observation alone may explain why the Brent oil price is staging a recovery.

This is the first oil production report for 3 months. There are two reasons for this. First, my son Neil who created and maintained the Google Sheets databases landed a job as an energy analyst 🙂 Second, the markets tend to move too slowly to warrant monthly commentary. I will therefore continue with occasional / quarterly reports. The other good news is that Google has re-instated the functionality of these live charts. Hover the cursor over the chart to read the data that lies below. Note that the order in the data box is inverse to the order plotted on the chart.

[Inset image shows idle drilling rigs stacked in the Moray Firth of Scotland.]

Drilling activity as measured using rig counts remains close to a cyclical high in OPEC. The return of drillers in the USA has stalled with US total rigs on 940 on 29th September, well up from the recent low of 469 seen in May last year but still well below the high of >2000 seen in December 2011.

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