The Energy Information Administration reported that June crude oil production dipped by 5,000 barrels per day, averaging 11.307 mmbd. This follows a modest decline in April. In addition, the June 914 figure compares to the EIA’s weekly estimates (interpolated) of 11.141 mmbd, a figure that was 164,000 lower than the actual 914 monthly estimate.
A largest gain was in New Mexico (43,000 b/d), followed by The Gulf of Mexico (18,000 b/d). On the other hand, production in Texas actually decline by 22,000 b/d.
Given the huge reduction in May 2020, production recovered by 865,000 b/d over the past 12 months. This number only includes crude oil.
The EIA-914 Petroleum Supply Monthly (PSM) average figure was nearly identical to the weekly data average reported by EIA in the Weekly Petroleum Supply Report (WPSR).
The 914 figure was 57,000 b/d higher than the August Short-Term Outlook's 11.270 mmbd estimate for that month. As a result, there would be no reason for a “rebenchmarking” to EIA’s model in future production levels.
The EIA is projecting that 2021 production will exit the year at 11.370 mmbd. And for 2022, it projects an exit at 12.230 mmbd.
Drilling rigs have been steadily rising, and the October WTI contract has rebounded to $ 68.73 /bbl as of August 31st.
Conclusions
The unprecedented oil price collapse of 2020 has not only been totally erased, but WTI is near its highest level since late 2018 when the market expected Iranian crude exports to be halted even though OPEC+ has agreed to raise production by about 2 mmbd through the end of 2021. As a result, oil Prices closed August with a monthly loss.
U.S. crude production has responded to a limited extent despite the higher prices. But there has been little growth in the past three months.
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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.
