Rystad Energy: U.S. crude oil production capacity to reach 10 MMbpd


OSLO -- Data released today from EIA for October largely confirms earlier predictions by Rystad Energy that U.S. oil production could reach 10 MMbpd at the end of 2017. Strong growth of U.S. onshore production in October was masked by impacts of hurricane Nate on offshore production in the Gulf of Mexico which was down as much as 250,000 bpd below monthly capacity. Still the new data comes out as much as 330,000 bpd higher than previous government predictions, and Rystad Energy expects EIA now would lift predictions for December close to an all-time high. Rystad Energy further predicts US crude oil production could pass the levels of both Saudi Arabia and Russia within a year from now.

US oil imports are shrinking to new lows while oil exports are increasing. The petroleum trade deficit in the US at merely 2.5 MMbpd when looking at all types of petroleum liquids. This deficit has fallen steeply from a peak of 12.5 MMbpd in 2007. With WTI Cushing at $60, or $6 below Brent crude, and U.S. refineries running at full speed, the U.S. oil trade gap will continue to shrink as U.S. oil production moves into unknown terrain above 10 MMbpd.

“We have noted EIA cannot account for 350 kbbld of crude flows in the fourth quarter. Based on our detailed well data, we find that half of those missing barrels comes from under-estimated oil production. EIA’s latest estimate for December production is at 9.77 MMbpd. Following the huge additions now confirmed for October, we expect EIA could raise December data by up to 300,000 bpd. And with production now growing by 25,000 bpd every week, this brings us to exactly 10 MMbpd at the last day of December, despite biting cold temperatures below -20°C in North Dakota causing some interruption of activities to connect newly fraced wells” says Per Magnus Nysveen, Head of Analysis at Rystad Energy.

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