US Crude Oil Production Could Hit a Record

API and EIA’s crude oil inventories  

The API (American Petroleum Institute) is scheduled to release its crude oil inventory report on November 21, 2017. Wall Street analysts expect that US crude oil inventories could have fallen by 2,167,000 barrels on November 10–17, 2017. A larger-than-expected fall in US crude oil inventories would benefit oil (OIL) (DWT) prices. The expectation of a fall in distillate inventories could also support diesel and crude oil prices.

The EIA (U.S. Energy Information Administration) will release its Weekly Petroleum Status report on November 22, 2017. US crude oil inventories were ~60 MMbbls or 15% higher than their five-year average for the week ending November 10, 2017. Any unexpected rise in US oil inventories could pressure oil (USO) (UCO) prices.

US Crude Oil Production Could Hit a Record

US crude oil production  

US crude oil production hit a record 9,645,000 bpd (barrels per day) for the week ending November 10, 2017. Production was at the highest level since 1983, which pressured oil (UWT) (DWT) prices last week. Lower oil prices impact energy producers’ (FXN) (IXC) earnings like SM Energy (SM), Hess (HES), PDC Energy (PDCE), and Marathon Oil (MRO).

The EIA estimated that US shale oil production would rise for the 12th straight month in December 2017. The International Energy Agency estimates that the US would account for 80% of the global rise in oil production in the next ten years. Tradition Energy’s McGillian expects that US crude oil production could hit 10,000,000 bpd within three to six months.

Impact  

Any rise in US oil production could offset some of the impacts of ongoing production cuts and weigh on crude oil (BNO) (USL) prices. It could also help bring back the crude oil glut.

Next, we’ll discuss how Saudi Arabia’s crude oil production and exports help the global oil market.