U.S. OIL PRODUCTION UP ANEW
EIA - U.S. crude oil production increased for the second consecutive month in November 2016, the first time this has occurred since early 2015. Increased drilling activity in the Permian region, which spans Texas and New Mexico, as well as the start of a number of new projects in the Federal Offshore Gulf of Mexico (GOM), more than offset declining production from other regions in October and November 2016.
Increased drilling in the Permian region responded relatively quickly to a rise in the West Texas Intermediate (WTI) crude oil price, which increased from an average of near $30 per barrel (b) in the first quarter of 2016 to $45/b or higher beginning in the second quarter of 2016. In the GOM, the new projects that came online in the last quarter of 2016 were planned and approved during the 2012–14 period.
U.S. crude oil production averaged an estimated 8.9 million barrels per day (b/d) in 2016, and monthly U.S. crude oil production increased by 232,000 b/d in October and by 105,000 b/d in November. Production in the Lower 48 states increased by 104,000 b/d in October and decreased by 2,000 b/d to average 6.7 million b/d in November, while GOM production increased by 85,000 b/d in October and by 89,000 b/d in November. Changes in Alaskan oil production make up the remaining differences.
Current crude oil prices above $50/b, combined with increasing drilling rig counts in several onshore basins, suggest U.S. crude oil production will likely continue to increase. The February Short-Term Energy Outlook (STEO) also forecasts year-over-year GOM production to increase by 30,000 b/d in 2017 and by an additional 140,000 b/d in 2018 to reach a total of 1.8 million b/d. Total U.S. crude oil production from the Lower 48 states, the GOM, and Alaska is expected to average 9.0 million b/d in 2017 and 9.5 million b/d in 2018.
EIA's Drilling Productivity Report uses monthly average rig count data to anticipate production changes in the coming months. Based on these recent increases in drilling, production in the seven regions included in the DPR is expected to increase from 4.8 million b/d in November 2016 to 4.9 million in March 2017.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.