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Why US Crude Oil Production Rose Last Week

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US crude oil production  

The EIA (U.S. Energy Information Administration) released its weekly crude oil inventory report on September 13. It reported that US crude oil production rose by 572,000 bpd (barrels per day) to 9,353,000 bpd from September 1 to 8. Production rose last week due to the rise in crude oil production in the lower 48 states of the United States.

Production rose 6.5% week-over-week and 860,000 bpd or 10% year-over-year. High production weighed on US crude oil (UWT)(DWT)(IEZ) prices. Consequently, US crude oil futures are down 13.7% YTD (year-to-date).

Lower crude oil (XES)(IXC) prices have a negative impact on oil and gas producers such as Matador Resources (MTDR), Comstock Resources (CRK), and Continental Resources (CLR). For details on monthly US crude oil production, see US Crude Oil Production Hit a 5-Month Low.

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US crude oil production’s peaks and lows 

US crude oil production hit 8.4 MMbpd in July 2016—its lowest level since May 2014. It hit a peak of 9.6 MMbpd (million barrels per day) in June 2015.

US crude oil production estimates 

The EIA released its “Short-Term Energy Outlook” report on September 12. It estimates that US crude oil production could average 9.25 MMbpd in 2017—1% or 100,000 bpd lower than previous estimates.

The EIA also estimates that US crude oil production could average 9.84 MMbpd in 2018—0.7% or 60,000 bpd lower than the previous estimates. Production averaged 8.9 MMbpd in 2016 and 9.4 MMbpd in 2015.

Impact 

US crude oil production could hit a record high in 2018. The rise in US crude oil production could offset some of the impact of the major producers’ production cut deal and pressure crude oil (SCO)(USO)(BNO) prices.

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

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