Weekly US crude oil production
The EIA (U.S. Energy Information Administration) reported that the US crude oil output was steady at 10,900,000 bpd (barrels per day) on June 22–29. The output was steady at a record high level for the third straight week. The US crude oil output increased by 1,562,000 bpd or ~16.7% year-over-year.
Since the lack of pipeline takeaway capacity constraining the supply, trade tariffs could limit demand. Both of the factors could limit crude oil’s production activity.
The EIA released its weekly US crude oil output data on July 5. Active WTI crude oil prices fell 1.6% on July 5 due to the surprise build in US crude oil inventories and steady US oil production. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 0.1% on the same day. XOP seeks to follow the performance of the S&P Oil & Gas Exploration & Production Select Industry Index.
WildHorse Resource Development (WRD), Marathon Oil (MRO), HollyFrontier (HFC), and CVR Energy (CVI) fell 2.74%, 2.68%, 2.54%, and 2.49%, respectively, on July 5. These stocks were the top percentage losses in XOP’s portfolio during this period. These stocks account for 4.7% of XOP’s holdings.
US crude oil production recovery
The US crude oil output dropped to 8,428,000 bpd for the week ending July 1, 2016, which was the lowest level in more than two years. Since then, the US crude oil output has risen by 2,472,000 bpd or 29.33%. Higher oil prices mainly led to the rise in the US crude oil output. Active WTI oil futures have risen 178.29% since February 11, 2016.
US crude oil production estimates
The EIA estimates that the US crude oil production could average 10,790,000 bpd in 2018 and 11,760,000 bpd in 2019. Production would hit the highest annual averages in 2018 and 2019 if the projections are achieved.
Record US crude oil output could weigh on oil prices. The rise in production from OPEC, Russia, and Saudi Arabia could also weigh on oil prices. However, these bullish drivers could support oil prices.
Next, we’ll discuss US crude oil exports.
US gasoline futures rose 0.6% to $2.13 per gallon on July 5 due to the larger-than-expected drop in gasoline inventories.
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