U.S. field production of crude oil increased in 2015 for the seventh consecutive year, reaching 9.42 million barrels per day (b/d).
This was the highest crude oil production level since 1972, based on final production numbers in EIA’s Petroleum Supply Annual. In 2015, production gains were highest in Texas, the Gulf of Mexico, and North Dakota, as these three regions accounted for 77% of the U.S. total increase.
Although annual production for 2015 grew, monthly U.S. crude oil production has declined since April 2015. Lower oil prices led to slower development activity, and production fell to 8.74 million b/d in August 2016, the latest month for which survey data is available. --- EIA
OPEC Throws US Oil Industry A Lifeline
The magic numbers:
- $40 oil: a lifeline for the US oil industry; they may or may not hang on
- $50 oil: they hang on and the US oil industry survives
- $60 oil: the US oil industry thrives
US producers took advantage of the brief rally to buy insurance against a weaker market in 2017, analysts say. Government data reveal that the category of trader that includes producers increased forward sales of WTI futures and options contracts by 4 per cent to 608m barrels equivalent — the biggest gross short position on record — in the two weeks between September 27 and October 11.
“OPEC was trying to shore up the price and the fundamentals of this market, but they inadvertently threw US producers a lifeline,” says Michael Tran, energy analyst at RBC Capital Markets. “US producers jumped on it and hedged production.”
Oil companies have over the past two weeks given upbeat views on the outlook for US production.
Chevron, which has a large land holding in the Permian Basin of western Texas, said its shale production had been running ahead of expectations and was up 24 per cent over the past year. The company said it was on course for 250,000-350,000 barrels of oil equivalent of production from the Permian by the end of 2020, up from a little under 150,000 boe/d today.
EOG Resources, one of the leading independent oil producers, raised its projected growth rate for 2017-20. William Thomas, chief executive, told analysts on a call that cost reductions meant that with $50-$60 oil, “we are now capable of growing a compounded 15 per cent to 25 per cent annually”.
Other companies have been talking about stepping up the rate at which they are drilling and completing wells. John Hess, chief executive of Hess, a US exploration and production company active in the Bakken formation of North Dakota, told analysts last month: “With the recent improvement in oil prices, we are making initial preparations to increase our drilling activity in the [Bakken] play next year.”
Continental Resources said it had raised its planned capital spending for 2016 by 20 per cent, as it starts bringing into production some of the wells it had drilled but not completed in the Bakken formation.
Virtually all of the growth in production last August came from federal waters in the Gulf of Mexico, not shale regions on land. One new offshore project was Noble Energy’s Gunflint field, which the company said went online in mid-July and was operating at “higher rates than expected”.Another analyst who lives under the Geico Rock:
The effect of the rise in drilling rigs should also not be overstated, as they are well below the count at the height of the shale boom and it takes time to drill and complete new wells. “Production is not a light switch,” says Energy Aspects, a consultancy.
Notes to the Granddaughters
The weather radar map suggested I might just be able to beat the thunderstorm if I bicycled very, very fast. The first four miles were beautiful but mildly unsettling. With a mile to go, it started to drizzle, and with only a half-mile to go, a fairly good downpour. But all in all, I made it to the library in pretty good shape. The trick will be getting home. LOL Wow, coffee (especially free Starbucks coffee) tastes great on a coolish, rainy day.
From the Dallas Morning News today: there are four art exhibits in Dallas-Fort Wroth you must see right now, from Monet to 'Divine Felines." We have already seen the Monet exhibit at the Kimball Museum. In fact, we have visited twice (blogged on this earlier) and I will return twice more, including once with the granddaughters and once more by myself, just to take one last look at this incredible collection that I will never, never see again. From the linked article:
The most conventionally important and beautiful of the four is surely the Kimbell Art Museum's survey of the first decade-and-a-half of the career of Claude Monet — the first such exhibition ever mounted. From one of his earliest known paintings of 1858 to the masterpiece of sailboats on the Seine painted on a summer day in 1872, this exhibition, "Monet: The Early Years," is masterfully curated by the Kimbell's deputy director, Dr. George Shackelford, one of the world's authorities on impressionism.
Shackelford has persuaded the most stubborn of museums and the most private of private collectors to part with their works and has, after two years of arm-twisting and sweet-talking, put together a superlative group of 56 paintings, many of which have never before been seen in Texas and some of which have not been included in any Monet exhibition in decades (or ever).