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US Crude Oil Production Is Steady

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Nov. 20 2020, Updated 12:12 p.m. ET

Weekly US crude oil production 

The EIA (U.S. Energy Information Administration) estimates that the US crude oil output was steady at 11 MMbpd (million barrels per day) on July 13–20. The production was steady at a record high for the second consecutive week. The production increased by ~2 MMbpd or 22.2% from a year ago.

The EIA released its US crude oil output data on July 25. Active WTI crude oil prices rose 1.1% on the same day. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 0.7% on July 25. XOP seeks to follow the performance of the S&P Oil & Gas Exploration & Production Select Industry Index.

SRC Energy (SRCI), PDC Energy (PDCE), Cabot Oil & Gas (COG), and SM Energy (SM) rose 3.5%, 3.3%, 2.9%, and 2.5%, respectively, on July 25. These stocks were among the top percentage gainers in XOP’s holdings on the same day. The stocks account for ~7% of XOP’s holding.

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Crude oil production in the Permian region 

Permian crude oil production could average 3.4 MMbpd in 2018 and 3.9 MMbpd in 2019, according to the EIA. The production averaged ~2.6 MMbpd in 2017.

Favorable geology, operational efficiency, and improving technology have made the Permian region one of the more economically favorable US crude oil production regions. However, low pipeline takeaway capacity could limit the oil supply.

US crude oil production estimates 

The US crude oil output could average ~10.8 MMbpd in 2018 and ~11.8 MMbpd in 2019. 

Impact 

Increased crude oil production from the US, OPEC, Russia, and Saudi Arabia and trade tariffs could pressure oil prices. However, other factors could support oil prices.

Next, we’ll discuss US crude oil exports.

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