SPR, Commercial Crude Oil Stock WIth More Than A Year's Worth Of Import Protection -- EIA -- December 9, 2015

From the EIA today:

As a member of the International Energy Agency (IEA), the United States is obligated to maintain stocks of crude oil and petroleum products, both public and private, to provide at least 90 days of import protection and to collectively participate in the release or sale of oil supplies to help balance a shortage among IEA members in the event of a severe energy supply disruption. Based on September levels of net crude oil and petroleum product imports, the SPR alone holds crude oil stocks equivalent to 156 days of import protection.

Including average levels of commercial stocks over the past 5 years, total days of import coverage provided by strategic and commercial stocks is currently 450 days.

I believe the US SPR holds about 700 million bbls of crude oil. 700 / 156 = 4.5 million bopd for import protection. 450 x 4.5 = 2,000 million bbls of crude oil in commercial + SPR storage. So I guess that means there's about 1,300 million bbls of crude oil in commercial (non-government) storage. I don't know. RBN Energy would know.

Of course this does not include additional storage currently being built throughout the US, or the amount of oil sitting in DUCs that could come available in less than a month.

1,000 DUCs x 20,000 bbls / month (the first full month) = 20 million bbls in North Dakota alone. But that is interesting. 1,000 DUCs sounds like a lot, but 20 million bbls, at a million bopd, amounts to just 20 days of current production. Disclaimer: I often make simple arithmetic errors.

Well, look at that. My "2,000 million bbls of crude oil in commercial + SPR storage" is a bull's eye. Wow. See this link, a dynamic link. That's pretty incredible that the numbers work that well. I'm going to get myself another cup of coffee.

Milestones:

• prior to 1975: commercial storage, only
• 1975: SPR begun by US government
• 1985 - 2004: steady stay; flat, background variability, 1,600 million bbls
• 2000: Bakken mini-boom begins in Montana
• 2007: Bakken boom begins in North Dakota
• 2009 - 2014: new floor established, around 1,750 million bbls
• 2015: step up to 2,000 million bbls

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The Fat Python

We don't need more oil production, we need more processing facilities, and we need more demand.

From Platts, previously posted.

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Global Crude Oil Growth: 2014 - 2016 (Inclusive)

The growth in global production in 2014 was about 2.55 million bopd. In 2015, growth will be about the same (2.5 million bopd) though the market share will be significantly different. In 2016, growth at 150,000 bopd will be "flat."

My thoughts:

• 2014: about 1 million bopd oversupplied (globally)
• 2015: the chart is an estimate, but the year is almost over, so it’s probably pretty accurate; about 2 million bopd oversupplied is what we are being told, and that’s about what the growth rate was, 2.55 million bopd in growth
• 2016: the growth is a net 150,000 bopd which suggests supply/demand more in balance, but for the entire year of 2014 there was probably an excess of 1 million bopd produced, and in 2015, an excess of 2 million bopd produced. That excess is sitting in government strategic reserves around the world, in commercial storage around the world, and there is no doubt, a lot unaccounted for. 

Since the US cannot export oil, it is very likely that US production would have fallen in 2015 regardless of what OPEC did. Producing at maximum rates, OPEC growth was about 1 million bopd. It seems to me that OPEC's current problems are totally self-inflicted. Had OPEC simply agreed to cut production by a paltry one million bopd, prices would have stayed historically high. By not cutting back on production, OPEC is giving their oil away at $40/bbl.

Look at the negative growth in the North Sea, especially in 2016. Combining such a huge negative growth with depressed prices suggest that England and Norway may feel the brunt of the slump.