US crude oil production: "the theory" said this is not supposed to happen.
Focus on fracking: link here.
- natural gas price hits 20 month low;
- commercial oil supplies at 19 month high;
- largest increase in DUC wells in 30 months
But look at this ... a long paragraph to get to the punch line:
Over the same period, production of crude from US wells was reportedly unchanged at 12,200,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 13,398,000 barrels per day during the January 20th reporting week…
See EIA data for US field production of crude oil, link here:
But as usual:
To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [+1,659,000] barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed...
Furthermore, since last week’s “unaccounted for crude oil” was at [+866,000] barrels per day, that means there was a 793,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, thus rendering those comparisons useless....
[... but we'll still report it .... ].
The FF guy is swinging fists at phantoms. The weeklies are not reliable for production because they are not based off of surveys like the monthlies (914). They are based off of the STEO, which is a model based on rig count and two month old monthlies. Also, they are never adjusted/corrected (so the time series is not helpful).
ReplyDeleteThis has been explained for years but we still get people either paying attention to weeklies or complaining about them. It's pointless. Wait for the monthlies. (The chart you showed, with NOV19 at 13 MM bopd.) Yes, it's two months old. (Like the Director's Cut is 1.5 months old.) But it's a real number.
The weeklies aren't data (except for inventories). They are just models. It's the "best guess". But it's not a report, it's a model.
And the balancing item has been explained ad nauseum also. It arises because they have independent methods of looking at different items. And then the balancing item resolves the differences. It's nothing mysterious. No conspiracies needed.
P.s. If anything, I think we are doing a little north of 12.2 in JAN. After all, we were almost 12.4 in OCT. Yes, ND and some other areas take a hit in the winter. But there's some remaining growth going on in NM and TX. Of course it's a guess, but I expect JAN (reported END of MAR, two months from now) to come in at 12.3 or higher. We'll see of course...
P.s.s. NM not longer has a rivalry with ND. You are too far in the rear view mirror. NM has its eyes on FGOM. ;)