|
US crude oil volumes up; oil price down
August US volumes exceed Russia, making US world’s leading crude oil producer; records set in Texas, North Dakota, federal Gulf Kristen Nelson Petroleum News
Domestic crude oil production topped 11 million barrels per day in August, the U.S. Energy Information Administration said in its November Short-Term Energy Forecast, released Nov. 6.
“U.S. crude oil production reached a record milestone in August 2018, when it exceeded 11 million barrels per day for the first time,” EIA Administrator Dr. Linda Capuano said in a statement accompanying the forecast release. “U.S. production has exceeded EIA’s previous expectations and, as a result, the short-term outlook now forecasts U.S. crude oil production to exceed 12 million barrels per day in 2019,” Capuano said.
EIA said the August volume was 11.3 million bpd, surpassing 11 million bpd for the first time. The agency also said August production was 290,000 bpd higher than estimated in the October STEO, raising the agency’s baseline for 2019. EIA said it now expects U.S. crude oil production to average 12.1 million bpd in 2019, compared with an October forecast of 11.8 million bpd.
The agency estimates that U.S. crude oil production averaged 11.4 million bpd in October, down slightly from September because of hurricane-related outages in the Gulf of Mexico. U.S. crude oil production is projected to average 11.9 million bpd in 2018, up from 9.4 million bpd in 2017.
Global volumes EIA said crude oil production in Saudi Arabia and Russia reached some of the highest levels in history in October, helping to offset months of supply losses from Iran and Venezuela. The oil production declines in Venezuela have slowed, EIA said, and estimates of its crude oil exports have increased. Libyan production resumed at a rate faster than expected because of improved security; the country has now produced more than 1 million bpd for two consecutive months.
EIA said Nov. 1 that the U.S. August production volume of 11.3 million bpd exceeded the Russian Ministry of Energy’s estimated August production of 11.2 million bpd, making the U.S. the world’s leading crude oil producer.
U.S. crude oil production first crossed the 10 million bpd mark in October 1970 and crossed the 10 million bpd mark again in November 2017.
EIA said monthly production reached a record high in several states in August: Texas at 4.6 million bpd and North Dakota at 1.3 million bpd. Record highs were also recorded in August in New Mexico, Oklahoma, Colorado and New Mexico. Federal Gulf of Mexico production also hit a record high in August at 1.9 million bpd.
The Permian accounts for some 63 percent of Texas crude oil production and 95 percent of New Mexico production.
Crude oil prices “October 2018 experienced the largest one-month percentage decrease in crude oil prices since July of 2016. EIA attributes the drop to indications of slower global economic growth and higher than expected supplies, as rising crude oil production in the United States, Saudi Arabia, and Russia more than offset decreasing production elsewhere,” Capuano said.
EIA said Brent crude oil spot prices averaged $81 per barrel in October, up $2 from September. The agency said that despite the increase in monthly average prices, Brent declined from $85 per barrel Oct. 1 to $75 per barrel Oct. 31.
Brent is forecast to average $72 per barrel in 2019, $3 lower than previously forecast, the agency said, with West Texas Intermediate expected to average $65 per barrel in 2019, $5 lower than previously forecast.
“The lower crude oil price forecasts are partly the result of higher expected crude oil production in the United States in the second half of 2018 and in 2019, which is expected to contribute to growth in global oil inventory and put downward pressure on crude oil prices,” EIA said.
Natural gas “The November outlook revises the forecast up for U.S. dry natural production in 2019, while the forecast for 2018 increased modestly,” Capuano said. “In both cases, U.S. dry natural gas production is poised to set new records in 2018 and 2019 - exceeding an average of 80 billion cubic feet per day this year and approaching 90 billion next year.”
Domestic dry natural gas production is estimated to have averaged 86.9 bcf per day in October, EIA said, up 0.7 bcf from September. Production is forecast to average 83.2 bcf this year, up 8.5 bcf from 2017. “Both the level and growth of natural gas production in 2018 would establish new records,” the agency said, with 2019 production projected to average 89.6 bcf per day.
The agency said it expects strong production growth to put downward pressure on natural gas prices next year, with Henry Hub spot prices expected to average $2.98 per million thermal units next year, down 4 cents from a 2018 average and down from a forecast average price of $3.25 in the fourth quarter of this year.
| 