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US Refined Product Inventories Push Crude Oil Prices Up

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Part 5
US Refined Product Inventories Push Crude Oil Prices Up PART 5 OF 11

Will Slowing US Crude Oil Production Support Crude Oil Prices?

Weekly US crude oil production 

The EIA (U.S. Energy Information Administration) reported that US crude oil production fell 17,000 bpd (barrels per day) to 8,450,000 bpd between September 30 and October 7.

Production fell 0.2% week-over-week and 7% year-over-year. Weekly US crude oil production is near a 28-month low. Slowing US crude oil production supports crude oil prices. For more on crude oil prices, read Part 1 of this series.

Higher crude oil prices could have a positive impact on the earnings of oil producers like Cobalt International Energy (CIE) and Northern Oil & Gas (NOG).

Will Slowing US Crude Oil Production Support Crude Oil Prices?

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Weekly US crude oil production  

US crude oil production fell by 36,000 bpd to 7,969,000 bpd in the lower 48 states between September 30 and October 7. Production rose 19,000 bpd to 481,000 bpd for the same period in Alaska. The decrease in crude oil production in the lower 48 states led to an overall decrease in US crude oil production.

Read Monthly US Crude Oil Production: Lowest Level since May 2014 to learn more about US crude oil’s monthly production. 

Peaks and lows 

US crude oil production peaked at 9,600,000 bpd in June 2015. On the other hand, it hit a low of 8,428,000 bpd for the week ending July 1, 2016—the lowest level since June 2014.

Lower crude oil prices, higher break-even costs, and higher production costs for US shale oil producers compared to other oil producers led to the fall in US crude oil production.

Lower crude oil prices could have a negative impact on the earnings of oil producers like Comstock Resources (CRK), and Northern Oil & Gas (NOG).

For more information on US energy companies’ financial challenges, read North American Oil and Gas Producers’ Debt Rose in 2015 and Crude Oil’s Total Cost of Production Impacts Major Oil Producers.

The roller coaster ride in crude oil prices also impacts funds such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the iShares Global Energy ETF (IXC), the Fidelity MSCI Energy (FENY), the iShares U.S. Oil Equipment & Services ETF (IEZ), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), and the PowerShares DWA Energy Momentum (PXI).

In the next part of this series, we’ll take a look at the US crude oil refinery input, crude oil imports, and crude oil production estimates.

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