Tag Archives: U.S. oil production

U.S. crude oil output hits 11 million barrels per day for first time ever

FILE PHOTO: A pump jack is seen at sunset near Midland, Texas, U.S., on May 3, 2017. Picture taken May 3, 2017. REUTERS/Ernest Scheyder/File Photo

By David Gaffen

(Reuters) – U.S. crude oil production last week hit 11 million barrels per day (bpd) for the first time in the nation’s history, the Energy Department said on Wednesday, as the ongoing boom in shale production continues to drive output.

The gains represent a rapid increase in output, as the data if confirmed by monthly figures, puts the United States just behind Russia as the world’s largest producer of crude oil. The nation has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling.

“I don’t think production is plateauing at 11. It’s fully expected to grow beyond 11 – we won’t be topping out there,” said Scott Shelton, a broker at ICAP in Durham, North Carolina.

Crude inventories increased 5.8 million barrels in the week to July 13, compared with analysts’ expectations for a decrease of 3.6 million barrels.

Crude futures edged down on the data. U.S. crude was down 55 cents to $67.51 a barrel, while Brent dropped 39 cents to $71.77 a barrel. The benchmarks have gained steadily since bottoming out below $30 a barrel in early 2016; U.S. crude is up nearly 12 percent this year.

Weekly production figures from the U.S. Energy Information Administration are notorious for revisions, however, as monthly data, released on a lag, shows U.S. production at 10.5 million bpd as of April.

In the last several weeks, the EIA has rounded off U.S. production to the nearest hundred thousand barrels, so that figure had been stuck at 10.9 million bpd for more than a month.

Russia’s oil production rose to 11.2 million bpd as of early July, sources familiar told Reuters.

Even as the United States has swiftly ramped up output in the last two years, the country still depends heavily on imports, as it remains the world’s largest oil consumer, with consumption of nearly 20 million bpd.

Net U.S. crude imports rose last week by 2.2 million bpd to about 9 million bpd.

Gasoline stocks fell by 3.2 million barrels, compared with analysts’ expectations in a Reuters poll for a drop of 44,000 barrels.

Distillate stockpiles, which include diesel and heating oil, fell by 371,000 barrels, versus expectations for an 873,000-barrel increase, the EIA data showed.

(Reporting By David Gaffen; additional reporting by Ayenat Mersie; Editing by Marguerita Choy)

Oil prices down, but set for biggest yearly gain since 2009

A worker fills a tank with subsidized fuel at a fuel station in Jakarta

By Ethan Lou

(Reuters) – Oil prices were down on Friday, but were still on track for their biggest annual gain since 2009 after OPEC and other major producers agreed to cut output to reduce a global supply overhang that has depressed prices for two years.

U.S. benchmark West Texas Intermediate (WTI) crude futures were down 25 cents at $53.52 a barrel by 9:38 a.m. EST on Friday, while Brent fell 26 cents to $56.59.

Brent has risen about 50 percent this year and WTI has climbed around 43 percent, the largest annual gains since 2009, when Brent and WTI rose 78 percent and 71 percent respectively.

Oil prices have more than halved since the summer of 2014, when it was above $100 a barrel. The fall in prices due to oversupply, in part thanks to the U.S. shale oil revolution, was accentuated later that year when Saudi Arabia rejected any OPEC deal to cut output and instead fought for market share.

But a new agreement to reduce production by the Organization of the Petroleum Exporting Countries (OPEC), struck over three months from September this year, marks a return to the 13-country group’s old objective of defending prices.

Oman told some customers it will reduce term allocations by 5 percent in March, but did not say whether the supply reduction would continue after that.

Although doubts remain as to the production cuts’ effectiveness in implementation, the rise in prices can be seen as “proof of international credibility,” for OPEC and partners, said Igor Yusufov, founder of the Fund Energy investment firm and a former Russian energy minister.

Equally as important to oil prices next year will be the development of demand globally, and major forecasters diverge in their predictions.

“We see a big variation in demand growth assessments for 2017, ranging from +1.22 million bpd (barrels per day) … to +1.57 million b/d,” analysts at JBC said in a note to clients.

“Overall, all forecasters agree that Asia will remain the main engine for demand growth.”

Oil will gradually rise towards $60 per barrel by the end of 2017, a Reuters poll showed on Thursday, with further upside capped by a strong dollar, a likely recovery in U.S. oil output, and possible non-compliance with agreed cuts.

The market on Friday shrugged off an unexpected increase in U.S. crude inventories, which rose 614,000 barrels in the week to Dec. 23 according to U.S. Energy Information Administration data. Analysts had expected a decrease of 2.1 million barrels.

(Reporting by Ethan Lou in Kingston, Ontario; Additional reporting by Sabina Zawadzki in London and Mark Tay in Singapore; Editing by Dale Hudson and Chizu Nomiyama)

Oil hits 2016 highs driven by falling supply and weaker dollar

Fuel prices are displayed at KazMunayGas gas station in Almaty

By Amanda Cooper

LONDON (Reuters) – Oil prices hit their highest in eight months on Tuesday, buoyed by the dollar nearing one-month lows and by falling Nigerian oil output after a spate of attacks on infrastructure.

Brent crude futures LCO were up 36 cents on the day at $50.91 a barrel by 1339 GMT, having hit an intraday peak of $51.30 earlier in the day, their highest since October.

U.S. crude oil futures CL gained 32 cents to trade at $50.01 a barrel, having touched a fresh 2016 peak of $50.37, their highest since October last year.

The price of oil has nearly doubled since January, when it hit its lowest since late 2003, boosted largely by a spate of unplanned outages that have eroded production in Canada, Venezuela, Libya and Nigeria, along with a steady decline in higher-cost U.S. shale output.

Yet analysts say the rally may entice some shale production back online, potentially damaging the prospects for a more sustained price rise.

“I think that is a bit of a risk right now,” Petromatrix analyst Olivier Jakob said.

“Last year, there was also a rally into June and that came to an end when the U.S. rig count started to increase … if we have another increase this week and another next week, then it will be harder to sustain the rally because there will be a perception that we’re back to production economics,” he said.

Market watchers are bracing for signs of a pick-up in U.S. oil production after weekly data from Baker Hughes showed U.S. drillers added rigs for only the second time this year, analysts said. RIG-OL-USA-BHI

Helping to reinforce Tuesday’s price rise was preliminary work to restart three of Total’s TOTF French oil refineries, stopped as part of nationwide strikes.

“With Brent staying above $50, oil is on an upward momentum with the restart of French refineries that were shut on strikes and pipeline attacks in Nigeria,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

Nigeria’s Bonny Light crude output is down by an estimated 170,000 barrels per day (bpd) following attacks on pipeline infrastructure, according to one source.

Oil, along with the rest of the commodities complex, has also been supported by a weaker dollar.

Federal Reserve Chair Janet Yellen has indicated the U.S. central bank will raise interest rates, but has not given a sense of when. [USD/]

U.S. commercial crude oil inventories likely fell by 3.5 million barrels last week, marking a third straight weekly drop, a preliminary Reuters poll showed. The data by the American Petroleum Institute is due out at 2030 GMT. [EIA/S]

(Additional reporting by Osamu Tsukimori in Tokyo; Editing by William Hardy and David Evans)