By David MacDonald A t 9.08 million barrels a day in April, US crude oil output was down in the month of May. The Energy Information Administration reported in early July that production was 190,000 barrels lower than their initial weekly estimates, according to Bloomberg.
The 1.1 and 2.2 percent increase of domestic onshore pro- duction in Texas and North Dakota respectively is not a result of domestic demand as diesel and heating oil also fell short of EIA projections on home shores. Overseas exports of distillates rose 13 percent, reaching a daily high of 1.32 million barrels in May. Increased gasoline demand was also added to the silver lining outlook in the US following a forecast that was make for some and break for others. “Generating estimates for domestic crude oil production is a challenge, given the large number of rigs/wells across the various plays, each with their own characteristics. Most months we are reasonably close, some better than other, and we use those results to inform changes we may want to make to improve those models going forward.” Source: Bloomberg EIA analyst, Robert Merriam spoke to Bloomberg in June via email in June.
This comes only a month after the EIA negatively adjusted its Permian oil estimates for the remainder of 2017.
But US output numbers for the remainder of 2017 and into 2018 are looking good. The EIA estimates that domestic output will increase every quarter, eventually passing the 10 million barrels per-day mark sometime in early 2018. This is largely because US shale drillers in Texas and North Dakota have been picking up the slack of a rig-driven industry in the Gulf of Mexico whose 5.8 percent output drop seems to reflect OPEC’s (Organization of the Petro- leum Exporting Countries) attempts to curb what is increas- ingly viewed on the world stage as a superfluous supply reserve.
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SPOTLIGHT ON BUSINESS MAGAZINE • JULY 2017
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