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US Crude Oil Production: Will It Cap Oil Prices in 2018?

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US crude oil production 

US crude oil production rose by 1,101,000 bpd (barrels per day) to 9,507,000 bpd on October 13–20, 2017. Production has risen by 1,003,000 bpd or 11.8% YoY (year-over-year). Any rise in US crude oil production is bearish for crude oil (USO) (DBO) prices.

On October 31, 2017, the EIA (U.S. Energy Information Administration) reported that US crude oil production fell by 31,000 bpd to 9,203,000 bpd in August 2017—compared to the previous month. However, production has risen by 487,000 bpd or 5.5% YoY. High US crude oil production has pressured crude oil (UCO) (USL) prices. As a result, US crude oil prices have fallen 4.3% year-to-date.

US crude oil (UWT) (DWT) prices have risen 9.3% in the last three months. Higher oil prices benefit oil producers (FENY) (IEO) like Anadarko Petroleum (APC), Whiting Petroleum (WLL), Stone Energy (SGY), and Marathon Oil (MRO).

US crude oil production peak and lows

US crude oil production hit a record of 9,600,000 bpd in June 2015. In contrast, production hit 8,428,000 in July 2016—the lowest level since June 2014. Production has risen by 1,079,000 bpd or 12.8% from the lows in July 2016.

EIA’s estimates for US crude oil production

US crude oil production will likely average 9,240,000 bpd and 9,920,000 bpd in 2017 and 2018, respectively. Production averaged 9,400,000 bpd in 2015 and 8,860,000 bpd in 2016.

Global equity research firm Jefferies expects that the US crude oil production will be lower than the forecasts in 2018.

Impact

Record US crude oil production in 2018 could weigh on crude oil (BNO) (USO) prices. It could also offset some of the impacts from current production cuts.

Read How Long Will Production Cuts Help the Global Crude Oil Market? for the latest updates on crude oil. Read These Key Factors Are Driving the US Natural Gas Market for updates on natural gas.

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