US Oil Production Has "Hit A Wall" -- Oilprice Contributor -- September 9, 2019

For the archives:

Two weeks ago, Oilprice.com published my notes which supported my belief that U.S. oil production has “hit a wall”. Archived.

Last week, EIA confirmed my conclusion. The EIA’s 941 report shows that after U.S. crude oil production peaked in April at 12,123,000 barrels of oil per day production declined 8,000 BOPD in May and another 33,000 BOPD in June.

Preliminary estimates say that when actuals are available for July, they will show an even larger decline.

These are not big declines, but with the active drilling rig count continuing to fall, I feel confident in telling you that U.S. oil production over the second half of this year is not going higher.

When EIA reports actual production figures for July at the end of this month, they are surely going to be lower because of the well shut-ins due to Hurricane Berry in the Gulf of Mexico.

Barring another GoM hurricane, oil production should rebound a bit in August and September. However, I don’t see anything that will return U.S. oil production to the peak set in April.

So, we will see.

EIA 941 reports at this link. Most recently, both Texas and North Dakota showed an increase in production in June, 2019, compared to May, 2019. Alaska and California, along with Oklahoma, Wyoming, and New Mexico, accounted for the greatest decline which was insignificant to say the least. Compare this data with export data from Saudi Arabia.

EIA 914 reports are at this link.

Again, for this oilprice contributor, it's all about rig counts.

Actually, there's something interesting about that. I might come back to that if I remember.

By the way, the oilprice contributor says we will see the data in the July 941's at the end of this month (September, 2019).

We may have a preview with the "EIA dashboards." The current dashboards have actual data through July, 2019, and projected data through September, 2019:

EIA dashboards: 

• EIA pdf, Bakken: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
• EIA, pdf, Permian: https://www.eia.gov/petroleum/drilling/pdf/permian.pdf
• EIA, pdf, Eagle Ford: https://www.eia.gov/petroleum/drilling/pdf/eagleford.pdf

The Eagle Ford is declining but I don't see declines in the Bakken or the Permian. And a lot of the decline in US shale is simply good business sense.

So, again, this is where we stand, reposting from above:

Last week, EIA confirmed my conclusion. The EIA’s 941 report shows that after U.S. crude oil production peaked in April at 12,123,000 barrels of oil per day production declined 8,000 BOPD in May and another 33,000 BOPD in June.

Preliminary estimates say that when actuals are available for July, they will show an even larger decline.

US crude oil production:

• April, 2019, all-time record: 12,123,000 bopd
• May, 2019, declined by 8,000 bopd (note the false precision)
• June, 2019, a further decline of 33,000 bopd

• 8,000 / 12,123,000 = 0.00066 or 0.066%
• 33,000 / 12,115,000 = 0.002724 or 0.272%

Background noise.

If the contributor is correct, he will write another article.

If the contributor is not correct, we won't hear a thing.

The EIA dashboards, September production over August production:

• Permian: up 75,000 bopd
• Bakken: up 3,000 bopd
• Eagle Ford: down 6,000 bopd
• net: up 72,000 bopd

Director's Cut for North Dakota, crude oil production:

• June, 2019, preliminary: 1.424624 million bopd; all-time record; an increase, month-over-month of 29,977 bopd [the final figure is generally higher than the preliminary figure]
• May, 2019: 1.394,648 million bopd; an increase of 2,163 bopd (essentially flat, but not a decrease)
• April, 2019: 1.392,485 million bopd: an increase of 725 bopd (flat, but not a decrease)
• March, 2019: 1.391,760 million bopd: