U.S. OIL PRIODUCTION UP TO 10.2 MBD
API - U.S. crude production rose to 10.2 million barrels per day (MBD) in January – the highest monthly output on record, according to API's monthly statistical report. This was an increase of 1.1 percent versus December and 15.1 percent from January 2017.
"In Olympic fashion, U.S. crude oil production scored a perfect "10" in January," said API Chief Economist Dean Foreman. "Record production of 10.2 MBD combined with a new high for refinery throughput, plus 6.3 MBD of crude oil and refined product exports, helped to narrow the price difference between U.S. and international crude prices last month, which reinforced the increasingly pivotal role of U.S. energy."
As U.S. crude exports rose, the price premium of international Brent crude oil prices above domestic West Texas Intermediate (WTI) crude oil narrowed to $3.50 per barrel as of February 5th from $5.38 per barrel at the end of January and $6.50 per barrel in December.
Separately, natural gas liquids production sustained near-record output in January at 4.0 MBD, which was an increase of 18.4 percent versus January 2017. According to the EIA's Short-Term Energy Outlook, released February 6, 2018, U.S. dry natural gas production averaged 77.6 billion cubic feet per day during January, which was up 9.9 percent from January 2017.
In addition to strong output and exports, U.S. petroleum demand, as measured by total domestic petroleum deliveries, rose to 20.3 million barrels a day in January, which was an increase of 5.5 percent compared with January 2017. It was the strongest January monthly demand since 2007.
- Consumer gasoline demand rose by 3.0 percent y/y to 8.8 MBD, which reflected how increases in economic growth and income have trumped the rise in crude oil and gasoline prices.
- With indicators of solid industrial activity and freight transportation, January distillate demand eclipsed 4.1 MBD, which was an increase of 0.8 percent versus December and 9.0 percent compared with January 2017. The 9.0 percent year to year increase marked a reversal of three years of declines for the month.
- Residual fuel oil, which is used for electric power production, space heating, vessel bunkering and other industrial applications, fell to 284 thousand barrels per day (KBD) in January. This represented decreases of 35.2 percent from December and 38.3 percent versus January 2017 and suggested increased natural gas substitution.
- "Other oils" – liquid petrochemical feedstocks, naphtha and gasoil – demand of 5.5 MBD was the highest monthly demand on record and second highest share of total monthly deliveries since 1965.
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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.