Oil Production Jumps Over 30% In The Permian -- Filloon -- March 26, 2018

Update on the Permian -- Mike Filloon.  Link here. Part 2 here.

Peak oil? What peak oil? The US is on the threshold of the biggest oil and gas boom ever -- Fortune magazine.

The U.S. is set to enjoy the biggest increase in oil and gas production the world has ever seen over the next few years, according to a new report out Tuesday.

The report from the International Energy Agency (IEA), a Paris-based think tank, is a thumping endorsement for the shale sector’s resilience in the face of a two-year attempt by Saudi Arabia and others to squeeze it. That’s already visible in U.S. government forecasts, which say U.S. crude oil production will rise from an average of 9.2 million barrels a day this year to 9.9 million barrels a day in 2018, a new all-time high beating a record set in 1970.

The IEA said the U.S. will account for 80% of the increase in global oil supply between now and 2025, as shale producers find ever more ways to pump oil profitably even at lower prices. By the late 2020s, the U.S. will become a net exporter of oil for the first time since the 1950s.

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Back to the Bakken

Active rigs:

$65.73→	3/26/2018	03/26/2017	03/26/2016	03/26/2015	03/26/2014
Active Rigs	60	49	32	99	198

RBN Energy: Permain crude oil takeaway capacity maxing out? Sounds like the Bakken during the boom. A great problem to have.

Crude oil production in the Permian Basin is coming on strong — faster than midstreamers can build pipeline takeaway capacity out of the basin. You can see the consequences in price differentials.  On Friday, the spread between Midland, TX and the Magellan East Houston terminal (MEH) on the Gulf Coast hit almost $5.00/bbl, a clear sign of takeaway capacity constraints out of the Permian.

We’ve seen different variations of this scenario play out in recent years, most recently last fall, just before the first oil started flowing through the new Midland-to-Sealy and Permian Express III pipelines, and it’s not good news for Permian producers. Now Permian output is again bouncing up against the capacity of takeaway pipelines and in-region refineries to deal with it. As we’ve seen in the past, that’s a warning sign for possible price-differential blowouts. Today, we discuss the fast-changing market dynamics that put Permian producers at risk for another round of depressed Midland prices.