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US April Oil Production Flat

US April Oil Production Flat

All of the oil (C + C) production data for the US state charts comes from the EIAʼs Petroleum Supply monthly PSM. After the production charts, an analysis of three EIA monthly reports that project future production is provided. The charts below are updated to April 2021 for the 10 largest US oil producing states.

U.S. April production was essentially flat. It decreased by 19 kb/d to 11,169 kb/d from Marchʼs output of 11,188 kb/d. It was also 113 kb/d higher than January’s.

The June STEO report forecasted US April output would be 11,082 kb/d vs the reported actual output for April of 11,169 kb/d, an under estimate of 87 kb/d. 

In the onshore lower 48, April production increased by 80 kb/d, red graph. The 99 kb/d difference between the US’ decrease and the On-shore L48’s increase was largely due to the 92 kb/d decrease from the GOM.

Ranking Production from US States

Listed above are the 10 states with the largest US production. These 10 accounted for 80.8% of US production out of a total production of 11,169 kb/d in April 2021. 

On a MoM basis, the largest barrel increases came from Colorado, Texas and New Mexico. On a YoY basis, all states except New Mexico and Utah had a lower output than last year. Note also that New Mexico’s output surpassed North Dakota and moved into second place.

Production by State

Texas production increased by 28 kb/d in April to 4,791 kb/d.  In the EIA’s June report, March’s output was revised up by 18 kb/d from 4,745 kb/d to 4,763 kb/d.

In April there were close to 194 oil rigs operation in Texas. By the fourth week of June 25, 201 were operating. From the end of April to the week of June 25, Texas added 7 oil rigs. It appears that the rate of adding rigs in Texas has slowed. See Rig chart in Section 4 further down.

April’s New Mexico production increased by 17 kb/d to 1,172 kb/d. April’s output is a new record.

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How Much Oil Can Saudi Arabia Really Produce?

How Much Oil Can Saudi Arabia Really Produce?

For decades, the true numbers relating to Saudi Arabia’s level of crude oil reserves and production have been a subject of much debate and confusion, not helped by the obfuscation from the Saudis over precisely what these numbers are. The reason for obfuscation is that Saudi Arabia’s only source of real power in the world begins and ends with its oil reserves and production, so the higher these numbers, the more the power, and the lower the number the less the power. In recent weeks this debate has become even more pronounced in the run-up to Saudi Arabia’s latest bond offering and in the debate oversupply and demand in the oil market over the remainder of this year and beyond. As detailed below, much of what Saudi Arabia has said about its oil reserves, current production, and likely future production is an exaggeration made for the purposes of self-aggrandizement but despite that, the numbers have increased somewhat compared to where they were 10 years ago.  To begin with the claimed crude oil reserves numbers: these have been a work of stunning bravado and almost complete fiction since 1990 when the Kingdom suddenly increased the official number from 170 billion barrels to 257 billion barrels, despite absolutely no new oil discoveries or improvements in recovery rates being made, as highlighted in my last book on the oil markets. Shortly thereafter, Saudi Arabia increased its official crude oil reserves numbers again, to 266.4 billion barrels, a level that persisted until a slight increase in 2017, to 268.5 billion barrels. Over the same period – in fact, from 1973 to last month – Saudi Arabia has pumped an average of 8.162 million barrels per day (bpd)…

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Decade Of Chaos Could Send Oil To $130 Per Barrel

Decade Of Chaos Could Send Oil To $130 Per Barrel

From $35 per barrel to $130 per barrel—this is the range for oil prices in the next few years that we could see, according to a commodity trading group. And it will all depend on what peaks first: demand or investment in new production. “You could see spikes to even higher than $100 a barrel, even $130, and you could also see it go down to $35 a barrel for periods of time going forward,” William Reed II, chief executive of Castleton Commodities International, said at the FT Global Commodities Summit this week, as quoted by Reuters. “The question is what happens first. Peak demand or peak investment?”

This is a fascinating question that will likely remain open for quite some time; it seems as if forecasts are even more unreliable than usual in the post-pandemic world. For instance, last year, energy authorities and the industry itself predicted oil demand growth was over thanks to the pandemic that encouraged a doubling down on an energy shift away from fossil fuels. Now, these same forecasters, including the International Energy Agency and BP (0.78%), are talking about growing oil demand.

One thing that can hardly be disputed is that lower spending on exploration would inevitably lead to lower production. This is what we have seen: the pandemic forced virtually everyone in the oil industry to slash their spending plans. This is what normally happens during the trough phase of an industry cycle.

What doesn’t normally happen in a usual cycle is long-term planning for smaller output. Yet this is the response of Big Oil to the push to go green. Most supermajors are planning changes that would effectively reduce their production of oil and gas. In Shell’s (1.31%) case, it has been literally ordered by a Dutch court to shrink its production of oil and gas.

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Oil Markets Baffled As The IEA Calls For More Production

Oil Markets Baffled As The IEA Calls For More Production

In its latest Monthly Oil Report, the IEA called on OPEC+ to increase production in order to counter higher demand in 2022.

The agency claimed that, based on current global economic growth expectations, demand for crude oil and petroleum products will be reaching pre-COVID levels by 2022. The Paris-based energy watchdog, which has come under fire after its shocking Net-Zero by 2050 report called for no more investments in oil and gas, stated that “OPEC+ needs to open the taps to keep the world oil markets adequately supplied”.  At the same time, the IEA has also reiterated that market realities are at odds with its proposed strategies to reach net zero-emission levels by 2050. Criticism will likely be harsh for the “former” leading oil and gas agency, as the agency has called upon the world to double down on renewables and commit to the Paris Agreement while admitting that the global economy continues to demand vast amounts of hydrocarbons.

The relevance of some of these reports will have to be reassessed, especially when looking at the high-profile “Golden Age of Gas” report and the “Net Zero by 2050” roadmap. When asked what needs to be done, the IEA indicated that the call on OPEC+ will be very strong, as the international oil and gas producers group will need to increase crude oil supply to the market by 1.4 million bpd in 2022. Which would mean a significant increase over its current July 2021-March 2022 targets.

The demand expectations of the IEA fall in line with some others, as OPEC, the EIA, and independent consultants, have stated before that demand for oil is going to increase substantially. Some even expect volumes in 2022 to be higher than 2019 levels, even as prices are increasing substantially.

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January Non-OPEC Oil Production Climbs Again

January Non-OPEC Oil Production Climbs Again

Below are a number of oil (C + C ) production charts for Non-OPEC countries created from data provided by the EIAʼs International Energy Statistics and updated to January 2021. Information from other sources such as OPEC, the STEO and country specific sites such as Russia, Norway and China is used to provide a short term outlook for future output and direction for a few countries and the world.

Non-OPEC production continued to climb from the May 2020 low of 45,272 kb/d. January’s output increased by 448 kb/d to 48,862 kb/d from December. The January increase was primarily driven by output increases from Brazil (147 kb/d) and China (164 kb/d). From May 2020 to January 2021, production increased by a total of 3,590 kb/d or an average of close to 450 kb/d/mth.

Using data from the April 2021 STEO, a projection for Non-OPEC output was made to December 2022 (red graph). Output is expected to reach 52,064 kb/d, which is lower than the previous high of December 2019, by close to 500 kb/d. February 2021 output is projected to drop by 1,534 kb/d due to the disruption caused by the major snow storm in the L48 U.S. states.

Ranking Production from NON-OPEC Countries

Above are listed the worldʼs 11th largest Non-OPEC producers. They produced 83.6% of the Non-OPEC output in January. On a YoY basis, Non-OPEC production decreased by 3,601 kb/d while on a MoM basis, production increased by 448 kb/d to 48,862 kb/d. World YoY output is down by 6,906 kb/d. As noted above, the January increase was primarily driven by output increases from Brazil (147 kb/d), China (164 kb/d) and Russia (111 kb/d), countries with the largest monthly increases.

The EIA reported Brazilʼs January production increased by 147 kb/d to 2,873 kb/d.

According to this source February’s output dropped by 8% from January to 2,730 kb/d and then recovered to 2,844 kb/d in March, according to this source (Red Markers).

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OPEC+ Will Keep A Lid On Oil Production

OPEC+ Will Keep A Lid On Oil Production

OPEC+ will likely decide to keep oil production essentially steady for another month, according to four Reuters sources.

Saudi Arabia and the UAE have both spoke out in favor of the need to tread lightly when it comes to how much oil is put into the market. And this week is perhaps proof positive that the group would be wise to heed.

On Tuesday this week, the price of Brent crude plunged to $60.86 per barrel from $69.63 per barrel on March 11. By Wednesday, the price had rebounded to nearly $64 per barrel—up more than 5% on the day.

The dramatic price fluctuations are attributable to a variety of events, including U.S. oil inventory figures, another round of lockdowns in the EU, AstraZeneca vaccine safety and efficacy concerns, and a vessel stuck in the Suez canal causing a traffic jam of oil tankers.

No matter the reason for the price swings, the data suggests that the market is still sensitive to stimuli—bullish or bearish, and nothing but a sustained increase in demand is likely to cure that.

Even if OPEC holds production steady for April—or allows a couple of eager producers to ramp up just slightly—there remain a couple of wildcards that threaten OPEC’s ability to keep supplies tight: Libya and Iran.

Libya, complete with its unified government and exempt from OPEC’s production cut agreement, has plans—and now perhaps the ability—to increase its oil production. Libya’s ambitions are to lift its oil production to 1.45 million bpd by the end of the year from 1.3 million bpd now.

Iran and Venezuela are also exempt from the production cuts. Iran’s oil exports have been on the rise, and Venezuela’s production has been rising, even if only slightly.

Julianne Geiger, Oilprice.com, opec+, oil production

OPEC Update, March 2021

OPEC Update, March 2021

The OPEC Monthly Oil Market Report for March 2021 was published this past week. The last month reported in each of the charts that follow is February 2021 and output reported for OPEC nations is crude oil output in thousands of barrels per day (kb/d). The numbers at the left side of the graphs show February 2021 output (and in some cases the trailing 12 month average output).

Figure 1

Figure 2

OPEC crude output decreased by 647 kb/d in February 2021, total OPEC crude output for January 2021 was not revised from last month’s report. Most of the decrease in OPEC output was due to a cutback in Saudi Arabia’s output by 930 kb/d from January to February 2021.

Figure 3
Figure 4
Figure 5
Figure 6
Figure 7
Figure 8
Figure 9
Figure 10
Figure 11
Figure 12
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Dennis Coyne, OPEC, oil , oil production, peak oil barrel

Is The World About To See An Oil Shortage?

The Death of Ahmed Zaki Yamani, the “Oil Sheik” who Understood Everything

The Death of Ahmed Zaki Yamani, the “Oil Sheik” who Understood Everything


Ahmed Zaki Yamani, oil minister of Saudi Arabia until 1986, died in London last week. In memory of the “oil sheik,” I reproduce here a comment that appeared on the ASPO-Italia blog in 2006. The interview of Yamani by Oriana Fallaci in 1976 is a good example of how the oil problem is misunderstood in the West and of the many lies told about it. Yamani, despite all the accusations and insults he received, was always a moderate who sought compromise. He managed to prevent his country, Saudi Arabia, from the disasters that befell all oil-producing countries in the Middle East.

Unfortunately, Yamani’s legacy has been somewhat lost over the years, but it is only now that Saudi Arabia is seeing bombs falling on its territory — a destiny that so far the country had avoided. Now, things are going to become very difficult as Saudi Arabia faces the unavoidable decline of its once abundant oil resources.

Yamani is remembered, among other things, for having said that “The Stone Age did not end because the world ran out of stone, and the Oil Age will end long before the world runs out of oil.” And, with that, he demonstrated that he had perfectly understood the concept of “EROEI” and the consequences of gradual depletion. 

http://aspoitalia.blogspot.com/2006/11/fallaci-intervista-yamani.html 

(Fallaci’s interview is available in full at this link.)

Fallaci interviews Yamani: thirty years later
Di Ugo Bardi – September 2006 (slightly edited for publication on “The Seneca Effect“)

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Shell says its oil production has peaked and will fall every year

Shell says its oil production has peaked and will fall every year

Royal Dutch Shell (RDSA) said its oil production and carbon emissions have peaked as it detailed plans to gradually wean itself off fossil fuels. Climate activists said it hadn’t gone far enough.

The Anglo-Dutch company said in a statement on Thursday that it expects its oil production to decline by between 1% and 2% each year after peaking in 2019. Its total carbon emissions likely peaked in 2018, it added.
Shell unveiled plans in September to become a net zero emissions business by 2050 (including from its own products and those that it sells), joining European rivals BP (BP) and Total (TOT) in making a shift towards clean energy.
The oil giants have written off billions of dollars of assets, spurred on by forecasts that global oil demand may never recover to levels reached before the pandemic, amid permanent changes to how people work and travel and growing concerns about the climate crisis.
Now Shell is setting out how it hopes to achieve its goals. It wants to sell more clean energy, while investing in carbon capture and forestation projects to offset emissions. It will also expand its biofuels production and distribution business.
“Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns,” said CEO Ben van Beurden.
While European oil companies try to reinvent themselves, America’s ExxonMobil (XOM) and Chevron (CVX) have so far resisted major changes to their businesses. But shareholders are agitating for a shift in direction and there are signs that the pressure may be starting to have an impact.

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The Real Crisis For Oil Is Yet To Come

The Real Crisis For Oil Is Yet To Come

Italian energy major, Eni, described 2020 as a “year of war”, regarding the energy crisis experienced in the face of a global pandemic. But it may be too soon to see the issues faced last year as a thing of the past.  Eni is committing to lower the price of oil at which the company breaks even going into 2021, as a means of tackling the uncertainty of the oil economy in the coming months. Francesco Gattei, CFO at Eni, stated that “Volatility is growing every year.”, highlighting the need to be prepared for the energy demand of the future.

In 2020, global fuel demand decreased by 30% on average. While demand appears to be steadily increasing as Covid-19 restrictions are relaxed, the worry is that this need may not increase to pre-pandemic levels anytime soon.

Oil giants BP Plc and Total SE published forecasts which hypothesized that oil demand was at its peak in 2019, and is therefore now in decline. This comes as the production of oil and liquid fuels at the global level peaked at 94.25 million bpd in 2020, down from 100.61 million bpd in 2019. According to the Energy Information Administration, this figure is expected to increase to just 97.42 million bpd in 2021.

2020 therefore proved the perfect time for environmentalists to campaign for a shift towards renewables; as oil demand and prices plummeted in April last year. As dozens of countries agreed to Paris Agreement objectives in December, with such promises as net-zero emissions over the next 30 years, many governments and investors have also put pressure on energy companies to develop renewable strategies.

The decrease in oil demand over the last year has already forced refineries in Asia and North America to close or curb output, particularly along the U.S. Gulf Coast as companies worry demand losses might never return.

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The Most Outrageous 2020 Oil Predictions

The Most Outrageous 2020 Oil Predictions

As we approach the close of 2020, we’re reminded of one statistical certainty when it comes to oil price predictions. If you set anything other than a range, you will be proven wrong. And even for the forecasters and predictors that do set a range, the likelihood that the actual price will fall within the chosen range is about as sure as a range of prices selected by throwing a dart at a number on the wall. That has never stopped oil price forecasters from giving it a go.

We’ve rounded up some of our favorite oil price predictions from this year. And while you’re thinking that this might not be a fair exercise given the black swan event such as the coronavirus pandemic, we will remind you that the predictions made even in the middle of the pandemic were quite suspect.

The U.S. Energy Information Administration (EIA) has the unfortunate position on our list of going first. Its January prediction for 2020 oil prices for both WTI and Brent would later prove to be high–not unsurprisingly given the events that were about to unfold. While there were reports that an outbreak was brewing as early as the first few days of January 2020, it wouldn’t be until January 13 that the first Covid-19 case was known to have escaped China’s borders. But when the EIA published its STEO on January 14, cratering oil demand due to the future pandemic wasn’t even on its radar. What was on its radar? Tensions between the United States and Iran, and the corresponding fear that there would be some oil supply disruption in the Middle East.

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The Collapse Of U.S. Shale Oil Production Has Now Begun

The Collapse Of U.S. Shale Oil Production Has Now Begun

It’s Official.  The collapse of U.S. shale oil production has begun.  The mighty Shale Oil BOOM has now finally turned into a BUST.  While the pandemic shutdowns sped up the process, the collapse of the U.S. shale industry was going to occur, regardless.  According to the U.S. Energy Information Agency, shale oil production will continue to decline below 7.5 million barrels per day in January.

At the peak last year, the top five shale oil fields combined production reached nearly 9.2 million barrels per day.  Since the shutdowns during March-April, many of the companies curtailed shale oil production.  However, all of these wells have now been brought online, but the massive decline rate is kicking in due to a lack of drilling and completion activity.

As we can see in the chart below, shale oil production in these five fields fell from 9.16 million barrels per day during the peak in 2019 to 7.27 million barrels per day forecasted next month (January).

In a little more than a year, the combined shale production from these five fields declined by 1.9 million barrels.  The data in the chart above is shown in thousand barrels per day.  According to Shaleprofile.com, these five fields add more than 11,000 new wells in 2019.  In looking at the new well trend data for Jan-Oct 2020, I would be surprised to see more than a total of about 5,000 wells added this year.

While the Permian suffered the highest decline in shale oil production, the biggest loser in percentage terms was the Anadarko Field.  Oil production from the Anadarko declined from 603,000 barrels per day (b/d) at the peak last year to a forecasted 363,000 bd in January.  That’s a stunning 40% decline in a little more than a year.

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U.S. crude output to decline more than previously forecast in 2020 -EIA

NEW YORK (Reuters) -U.S. crude oil production is expected to fall by 910,000 barrels per day (bpd) in 2020 to 11.34 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, a steeper decline than its previous forecast for a drop of 860,000 bpd.

Output next year is expected to slide by 240,000 bpd to 11.10 million bpd, a smaller decline compared to the previous forecast for a slide of 290,000 bpd.

U.S. shale production has languished as oil prices collapsed after the coronavirus pandemic eroded global demand. But as hopes for a widespread rollout of a vaccine rise, U.S. crude oil production has recovered from the two-and-a-half-year lows touched in May.

Producers have begun to add drilling rigs and brought wells back online in response to the rebound in prices. [RIG/U]

Still, the EIA said that U.S. crude oil production will decline to less than 11 million bpd in March 2021 mostly because of falling production in the lower 48 states, where declining production rates at existing wells is expected to outpace production from newly drilled wells in the coming months.

The agency also expects U.S. petroleum and other liquid fuel consumption to decline 2.38 million bpd to 18.16 million bpd in 2020, unchanged from its previous forecast.

In 2021, U.S. oil demand is expected to climb by 1.63 million bpd to 19.79 million bpd, a smaller increase than its previous estimate for a rise of 1.69 million bpd.

Global consumption of petroleum and liquid fuels is expected to average 92.4 million bpd for all of 2020, which is down by 8.8 million bpd from 2019, before increasing by 5.8 million bpd in 2021, the EIA said.

What Oil’s Troubles Mean to the Rest of Us

To the extent that stock prices reflect expectations of future value, investors don’t like the prospects for oil, and oil’s demise signals muted prospects for economic growth.

Exxon-Mobil (XOM) was removed from the Dow Jones Industrial Average this past August, ending a run that began when the Dow expanded to 30 stocks in 1928. This leaves Chevron as the sole oil company in the index. For most of those 92 years, there were three oil majors in the Index (Standard of NJ/Exxon, Texaco, and Standard of CA/Chevron) – now there is one. Should you care?

In one sense, no. The Dow is an actively-managed index, and 11 of the current 30 firms have replaced other names since 2000. (Exxon-Mobil was replaced by Salesforce.) The financial media treats changes in the Dow as measures of overall market levels, but little money is actually invested in DJIA-linked products. There’s an interesting article in all that, but it’s not this one.

On the other hand, the Dow committee likes to include industries and companies that are growing and successful. Removing XOM is a measure of the decline of the economic status of “big oil.” Over the last two months, both XOM and BP have approached their lows from this past March, which were in turn the lowest prices for those stocks since 1994 (BP) or 1997 (XOM). The S&P 500 has grown by a factor of four since 1997.

The WTI price of oil is (as of October 2020) around $40 per barrel, which is the lowest since 2003 on an inflation-adjusted basis except for a brief period at the start of 2016 and a few weeks this spring. This reflects the abundance of oil supplies after the COVID-induced demand collapse, but it also is a price below what’s necessary to operate much of the industry profitably…

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Olduvai IV: Courage
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Olduvai II: Exodus
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