New IEA Data May Indicate A Slowdown In Rig Count Drop
The IEA OMR is out early this month hence April’s edition of vital statistics comes early. The March 2015 Vital Statistics is here. EIA oil price and Baker Hughes rig count charts are updated to the end of March 2015, the remaining oil production charts are updated to February 2015 using the IEA OMR data. The main oil production changes from January to February are:
• World total liquids up 80,000 bpd
• OPEC down 90,000 bpd
• N America up 220,000 bpd
• Russia and FSU up 10,000 bpd
• UK and Norway up 100,000 bpd (compared with February 2014)
• Asia up 30,000 bpd
1. Global oil production is declining slowly but remains just above its long-term trend. Just over 94.04 Mbpd was produced in February.
2. The recovery in the oil price in February reversed in March and WTI has tested its January lows. Spreading conflict in the Middle East adds further complexity to the price dynamic.
3. The plunge in US oil rig count has slowed significantly although it continues falling slowly. This may signal a new phase of the oil price war that is discussed at the end of this post.
4. I anticipate that the price bottom may be in, but that price will bounce sideways along bottom for several months until we see significant falls in OECD production. Whilst there are signs that global production is falling slowly there is as yet little sign of a significant drop in US production.
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