World Oil Supply And Price Outlook, November 2019

The Energy Information Administration released its Short-Term Energy Outlook for November, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.794 billion barrels. It estimated stocks rose by 1 million barrels in October to 2.909 billion, 69 million barrels higher than a year ago.

For the balance of 2019, OECD inventories are projected to stabilize at 2.900 billion, 55 million higher than end-2018. For 2020, EIA projects that stocks will build by 59 million barrels to end the year at 2.959 billion.

Oil

The EIA estimated that OPEC production rose by 1.325 million barrels per day in October, 1.3 of which was in Saudi Arabia due to the recovery from the attack on its oil facilities. It is estimating that OPEC production averaged about 29.52 million in October. For 2020, it estimates that OPEC production will average about 29.52 million, about 160,000 b/d above the call (demand) for OPEC oil in 2020. Continue reading "World Oil Supply And Price Outlook, November 2019"

U.S. Crude Production Surged In August

The Energy Information Administration reported that August crude oil production averaged 12.365 million barrels per day (mmbd), up 599,000 b/d from July. The gain was primarily due to the fact that July production had dropped due to Tropical Storm Barry, which shut-in 9.2 million barrels, or 297,000 b/d for the month, based on real-time estimates. In addition, July production was revised downward by 40,000 b/d. Nevertheless, the net increase of around 250,000 b/d from the adjusted July figure was a large increase and confirms the EIA’s weekly estimates for the month.

Production in the Gulf of Mexico reached a new high at 2.006 mmbd. The previous record was 1.979 mmbd in April. Texas production also reached a new high of 5.121 mmbd, up 98,000 b/d from July. Other gains were 43,000 b/d in New Mexico, 28,000 b/d in North Dakota, 15,000 b/d in Louisiana and 12,000 b/d in Colorado. Alaska was down 66,000 b/d for seasonal reasons, and that production is likely to return.

Plains All American Pipeline LP’s (PAA) Cactus ll pipeline was expected to ship 300,000 b/d in August and to be at full capacity, 670,000 b/d, in September. EPIC Midstream’s crude oil pipeline began shipping 400,000 b/d. It is designed to ship 440,000 b/d from the Permian and another 150,000 b/d from the Eagle Ford.

Phillips 66 Partner’s Gray Oak pipeline is expected to ship an additional 900,000 b/d. It is scheduled to being shipments by year-end.

The effect of the pipeline additions will narrow the spread between Midland and the U.S. gulf prices, effectively lowering breakeven costs in the Permian.

Crude Production
Continue reading "U.S. Crude Production Surged In August"

World Oil Supply And Price Outlook, October 2019

The Energy Information Administration released its Short-Term Energy Outlook for October, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.807 billion barrels. It estimated stocks dropped by 11 million barrels in September to 2.882 billion, 24 million barrels higher than a year ago.

For the balance of 2019, OECD inventories are projected to rise, on balance. The third quarter seasonal stock draw was 26 million barrels. And stocks are projected to rise by 6 million in the fourth quarter, ending the year at 2.878 billion barrels, 15 million more than at the end of 2018. For 2020, EIA projects that stocks will build by 59 million barrels to end the year at 2.937 billion.

Oil

The EIA estimated that OPEC production fell by 1.55 million barrels per day in September, most of which was in Saudi Arabia due to the attack on its oil facilities. It is estimating that OPEC production will average about 29.69 million in October, due to the rebound by Aramco. For 2020, it estimates that OPEC production will average about 29.62 million, above the call (demand) for OPEC oil in 2020. Continue reading "World Oil Supply And Price Outlook, October 2019"

World Oil Supply And Price Outlook, September 2019

The Energy Information Administration released its Short-Term Energy Outlook for September, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.805 billion barrels. It estimated stocks edged 1 million barrels higher in August to 2.895 billion, 43 million barrels higher than a year ago.

For the balance of 2019, OECD inventories are projected to rise, on balance. The third quarter seasonal stock draw was over in July. Third-quarter stocks are projected to rise by 2 million, instead of the seasonal draw. And stocks are projected to rise by 6 million in the fourth quarter, ending the year at 2.911 billion barrels, 50 million more than at the end of 2018. For 2020, EIA projects that stocks will build 67 million barrels to end the year at 2.978 billion.

Oil

The EIA has confirmed that OPEC production edged higher (23,000 b/d) in August v. July. It is also estimating that OPEC production will average about 29.6 million in 2020, and that figure is about 400,000 b/d higher than OPEC’s August estimate of the call (demand) for OPEC oil in 2020. Continue reading "World Oil Supply And Price Outlook, September 2019"

U.S. Crude Production Growth Paused In 1H19

The Energy Information Administration reported that June crude oil production averaged 12.082 million barrels per day (mmbd), down 33,000 b/d from May. The drop resulted from a drop of 58,000 b/d in Oklahoma. Production gained the most in North Dakota (58,000) and Colorado (19,000) while production in Texas was only up 13,000 b/d.

Crude Production

A pause in the growth rate in Texas had been expected due to pipeline constraints, which are expected to be alleviated in the second half of 2019 and first half of 2020. Nevertheless, Texas production reached a new all-time high of 4.982 mmbd.

US Crude Production

The year-over-year gains have been especially impressive with the June figure being 1.410 mmbd. And this number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply add to that. For June, that additional gain is about 540,000 b/d. Continue reading "U.S. Crude Production Growth Paused In 1H19"