Summary
- U.S. oil production is currently around ~13 million b/d.
- But despite the overall meaningful decrease in Lower 48 gas production, associated gas production remains strong.
- In addition, EIA’s reported weekly NGL production continues to outpace crude production growth.
- The market still falsely believes that US shale will continue for many years to come, but we think the reality is different from that.
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mustafaUEIA oil storage report was fairly bullish today, with the crude draw of 6.4 million bbls outpacing our forecast of -4.33 million bbls. More importantly, in these weekly reports, we watch just how accurate we are at estimating U.S. crude production. And so far, things are looking good.
HFIR
Looking at our real-time US oil production data, we saw a brief spike in implied US oil production in March. Considering that the weather fully normalized in the 2nd half of February and into March, US shale oil producers likely brought back production to full capacity by early March and sold off stored-up inventory. This likely caused a dislocation in our modified adjustment, which showed a false bump higher in production.
Why do we say that it was temporary? Well, if you look at the latest reading, the implied US oil production figure is back down to ~13 million b/d.
Another good way for readers to gauge just how accurate we are on US oil production is by looking at our US weekly crude storage estimate figure vs the EIA. If our draw is smaller than what EIA reports, then it implies a lower US oil production figure than we estimated…
…click on the above link to read the rest of the article…
