Weekly US crude oil production
The EIA estimates that US crude oil production increased by 332,000 bpd (barrels per day) to a record high of 10,251,000 bpd on January 26–February 2, 2018. Production increased by 1,273,000 bpd or 14.2% year-over-year.
The EIA released the production data on February 7, 2018. News of record production pressured WTI crude oil prices. Prices hit a one-month low on February 7, 2018. Lower oil prices have a negative impact on funds like the VelocityShares 3x Long Crude Oil ETN (UWT) and the United States 12 Month Oil Fund (USL). These ETFs follows crude oil futures. UWT and USL also hit a one-month low on February 7, 2018. UWT fell 8.2% to 26.3 on February 7, 2018, while USL fell 2.3% to 21.1 on the same day.
US crude oil production recovery
US crude oil production has increased by 1,823,000 bpd or 21.6% since July 1, 2016. US oil prices have increased 136% since February 11, 2016. Higher oil prices and improved drilling costs led the rise in US oil production.
Estimates for 2018
The EIA released the STEO (Short-Term Energy Outlook) report on February 6, 2018. The EIA estimates that US oil production could average 10.59 MMbpd (million barrels per day) in 2018, which is 3.1% higher than the estimates in January 2018.
The EIA also expects that US oil production could average 11.18 MMbpd in 2019—3.1% higher than the estimates in January 2018. US oil production could hit the highest annual average in 2018 and 2019.
Output cuts and US oil production
US oil production is expected to rise 18.4% or by 1,649,000 bpd between January 2017 and December 2018. If US production rises at this speed, it could offset ~90% of the production cuts by major oil producers.
Record US oil production could pressure oil prices in 2018. Non-OPEC production is expected to rise by 1,150,000 bpd in 2018, which could also pressure oil prices.
Next, we’ll discuss US gasoline inventories.