US crude oil production
The EIA (U.S. Energy Information Administration) reported that US crude oil production rose by 24,000 bpd (barrels per day) to 9,001,000 bpd between February 10 and February 17, 2017. Production rose 0.3% week-over-week but fell 1.1% year-over-year. US crude oil production is at the highest level since April 2016. The rise in US crude oil production can pressure crude oil (ERX) (USL) (FENY) prices.
Lower crude oil prices have a negative impact on the earnings of oil and gas producers like Apache (APA), Northern Oil & Gas (NOG), Devon Energy (DVN), and Triangle Petroleum (TPLM). For more on crude oil prices, read part one of this series.
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. Since then, US crude oil production has risen ~6.8%.
US crude oil production estimates
The EIA estimates that US crude oil production will average 8,980,000 bpd (barrels per day) and 9,530,000 bpd in 2017 and 2018, respectively. US crude oil production averaged 8,880,000 bpd in 2016. The EIA estimates that US crude oil production will rise to a 48-year high in 2018.
US production could rise in 2017 due to the following factors:
- higher crude oil prices in 2017
- technological advances causing a rise in US drilling activity even at lower crude oil prices
- implementation of President Trump’s proposed energy policies
In the next part of this series, we’ll take a look at US crude oil refinery input and crude oil imports.