U.S. Crude Oil Production Steady In December

The Energy Information Administration reported that December crude oil production fell by 58,000 barrels per day, averaging 11.063 mmbd. This follows a 682,000 b/d rise in November. The December 914 figure compares to the EIA’s weekly estimates (interpolated) of 11.100 mmbd, a figure that was 37,000 b/d higher.

Drops in production were experienced in New Mexico (42,000 b/d), North Dakota (38,000 b/d), and Texas (34,000 b/d). But output in the US Gulf Coast rose by 70,000 b/d.

Given the huge reduction in May, oil production dropped by 1.7 mmb/d over the past 12 months. This number only includes crude oil.

The EIA-914 Petroleum Supply Monthly (PSM) figure was 37,000 barrels per day lower than the weekly data reported by EIA in the Weekly Petroleum Supply Report (WPSR).

The 914 figure was about 46,000 lower than the 11.11 mmbd estimate for that month in the February Short-Term Outlook. This difference is not enough to trigger a “rebenchmarking” to EIA’s model in future oil production levels at this time.

The EIA is projecting that 2021 production will exit the year at 11.27 mmbd. And for 2022, it projects an exit at 11.93 mmbd.

But drilling rigs have been steadily rising and the April WTI contract has rebounded to $62/bbl.

Conclusions

The unprecedented oil price collapse of 2020 has been totally erased and U.S. crude oil production has responded. It appears that EIA projections for low growth in 2021 is too pessimistic.

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Best,
Robert Boslego
INO.com Contributor - Energies

Disclosure: This contributor does not own any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.