US crude oil production
The EIA (U.S. Energy Information Administration) reported that US crude oil production rose by 32,000 bpd (barrels per day) to 9,429,000 bpd on July 7–14, 2017. Production is at a two-year high. US crude oil production rose 0.34% for the week ending July 14, 2017—compared to the previous week. Production rose 11.8% from the same period in 2016. For more on monthly production, read How Monthly US Crude Oil Production Has Supported Crude Prices.
US crude oil production estimates
The EIA estimates that US crude oil production could average 9.3 MMbpd in 2017—500,000 bpd higher than 2016. The EIA thinks that US crude oil production will average 9.9 MMbpd in 2018—the highest level ever. US crude oil production peaked at 9,600,000 bpd in 1970.
US crude oil production is expected to rise in 2H17 and 2018 predominantly in the Permian and the Federal Offshore Gulf of Mexico region. The Permian region will likely contribute 30% of the US crude oil production in 2018. Oil producers can drill in the Permian regions even if US crude oil prices stay below $50 per barrel. Improving efficiency and technological advancement would contribute to drilling activity despite lower oil prices.
President Trump’s energy plans and a rise in US crude oil rigs would lead to oversupply. The rise in production for the Brazil, Canada, Kazakhstan, and the United Kingdom in 2018 would also add to the supplies. It could offset the production cut deal and pressure oil (USO) (UCO) prices.
In the next part of this series, we’ll look at US gasoline inventories for the last week.