US crude oil production  

The EIA (U.S. Energy Information Administration) reported that US crude oil production rose by 12,000 bpd (barrels per day) to 9,330,000 bpd on June 2–9, 2017. US crude oil production has risen 11.2% from the low in July 2016. The rise in US crude oil production pressured crude oil (USO) (UCO) (SCO) prices. July US crude oil futures have fallen 21.2% YTD due to the rise in US production.

EIA, IEA, and OPEC Expect US Crude Oil Production to Rise

Lower crude oil prices have a negative impact on oil producers like Apache (APA), Noble Energy (NBL), Matador Resources (MTDR), and QEP Resources (QEP).

Tug of war between OPEC and the US 

US crude oil production hit a peak in 2015. As a result, OPEC increased production in order to capture market share. High production from the US and OPEC led to oversupply. Crude oil prices fell in 2H15 and 2016. Lower oil prices led to a decline in US production in 2016.

On November 30, 2017, OPEC decided that it would reduce production in order to rebalance the oil market and support oil prices. During 2H16 and 1Q17, tUS crude oil production recovered due to improved technology and increased efficiency in production and lifting costs.

US crude oil production estimates 

In June 2017, OPEC estimates that US crude oil production will rise by 800,000 bpd in 2017. In December 2016, OPEC estimated that US production would fall by 150,000 bpd in 2017.

The International Energy Agency expects US crude oil production to rise by 620,000 bpd in 2017.

The EIA expects US crude oil production to rise by 460,000 bpd in 2017. Read Will US Crude Oil Production Make History? to learn more.

Higher production from the US, Brazil, Canada, Libya, and Nigeria in 2017 could range between ~1.2 MMbpd (million barrels per day) and ~1.5 MMbpd. It would pressure oil prices and offset the production cut deal.

In the next part of this series, we’ll look at US gasoline demand and inventories.

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