U.S. OIL PRODUCTION UP
U.S. crude oil production from the Lower 48 states from new wells (drilled since the start of 2014) made up 48% of total U.S. crude oil production in 2015, up from 22% in 2007. Production from new wells has grown as advances in horizontal drilling and completion techniques led to growth in oil production from low-permeability tight reservoirs. In 2015, production from tight formations—which include, but are not limited to, shale plays—accounted for more than 4 million barrels per day (b/d), or 50% of total U.S. oil production.
U.S. oil production from tight formations increased from 0.5 million b/d in 2009 to 4.6 million b/d in May 2015, at which point decreasing oil prices contributed to declines in oil production. As of December 2015, oil production from tight formations was 8% lower than the level in May. More than 80% of oil production from tight formations originates from the Eagle Ford, Bakken, and Permian regions.
Horizontal wells drilled into tight formations tend to have very high initial production rates, but they also have steep initial decline rates. With steep decline rates, constant drilling and development of new wells is necessary to maintain or increase production levels. Rig counts and the productivity of newly drilled wells, which are tracked in EIA's Drilling Productivity Report, are two key indicators of future oil production. Future production can also be affected by the current inventory of drilled but not yet completed wells and the potential for recompleting and refracturing existing wells that may increase production from already-producing wells without drilling new wells. The U.S. oil-directed rig count totaled nearly 1,600 rigs in the fall of 2014. However, the decline in oil prices over the past 18 months has reduced drilling activity, with just 413 rigs operating as of February 19, 2016.
Low oil prices and reduced capital expenditure for drilling new wells have been reflected in declining crude oil production in the United States since May 2015, despite the continuing increase in initial production rates of the new wells that were still being drilled and completed. Oil production from new wells has so far been able to keep U.S. crude oil production from falling significantly below its level in late 2014. U.S. oil production will decline over the next two years, falling to 8.7 million b/d in 2016 and to 8.2 million b/d in 2017.
|May, 25, 10:55:00|
|May, 25, 10:50:00|
|May, 25, 10:45:00|
|May, 25, 10:40:00|
|May, 25, 10:35:00|
|May, 25, 10:30:00|
REUTERS - Brent LCOc1 futures fell 43 cents, or 0.5 percent, to $79.14 a barrel by 0218 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014. U.S. West Texas Intermediate (WTI) crude CLc1 futures eased 25 cents, or 0.4 percent, to $71.95 a barrel, having climbed on Tuesday to $72.83 a barrel, the highest since November 2014.
FT - Most oil majors can now cover dividends and capital expenditure at prices around $50 per barrel, meaning that, at $80, they make a healthy surplus.
EIA - The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2017, reaching a record high. The United States has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and the world's top producer of petroleum hydrocarbons since 2013, when U.S. production exceeded Saudi Arabia’s. Since 2008, U.S. petroleum and natural gas production has increased by nearly 60%.
PLATTS - China became the largest contributor to global LNG consumption growth in 2017. It surpassed South Korea as the world's second largest LNG importer and its share of global LNG demand is expected to converge with that of Japan by 2030.