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US Crude Oil Production: A Thorn for Crude Oil Bulls?

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Nov. 20 2020, Updated 10:50 a.m. ET

US crude oil production  

The EIA (U.S. Energy Information Administration) reported that US crude oil production rose by 21,000 bpd (barrels per day) to 9,314,000 bpd between April 28, 2017, and May 5, 2017.

Production rose 0.2% week-over-week and 5.8% year-over-year. US crude oil production is near the highest level since August 21, 2015. The rise in US crude oil production pressured crude oil prices. As a result, US crude oil (FENY) (XES) (BNO) prices are down 15.9% YTD (year-to-date).

Lower crude oil prices have a negative impact on oil and gas producers’ earnings like Devon Energy (DVN), Swift Energy (SFY), Hess (HES), Chevron (CVX), and SM Energy (SM). For more on crude oil prices, read Part 1 of this series.

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Peaks and lows  

US crude oil production peaked at 9,600,000 bpd (barrels per day) in June 2015. In contrast, 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 ~10.4%.

US crude oil production estimates 

The EIA estimates that US crude oil production will likely hit a 48-year high in 2018. For more on the latest US production estimates, read EIA Upgraded US Crude Oil Production Estimates.

US production could rise in 2017 due to the following factors:

Tyche Capital Advisors thinks that if US production rose at the current pace, it would offset the reduction in supply from major oil producers’ output deal.

Read Could US Crude Oil Production Push Production Cut Deal Past 2017? for more on monthly US crude oil production.

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

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