Pump it up
Domestic oil production increased to 9.2 million barrels per day this week, up 36,000 barrels a day from last week.
While many of the world’s largest oil exporters are considering extending production cuts another six months, U.S. production is increasing and is likely to continue growing.
Domestic production increased to 9.2 million barrels per day this week, up 36,000 barrels a day from last week and up 258,000 barrels per day from one year ago, the U.S. Energy Information Administration said this week.
Executives have outlined plans to increase drilling this year, especially in Oklahoma and west and south Texas. We’ll get a better picture of that progress over the next month when public companies report firstquarter earnings.
While much of the focus on U.S. drilling has been with onshore horizontal drilling, production also is increasing in the Gulf of Mexico. Production in the gulf hit an annual high of 1.6 million barrels per day last year, outperforming the previous high set in 2009 by 44,000 barrels per day, the EIA said Thursday.
Production increased to 1.7 million barrels per day in January, marking the fourth consecutive month of growth.
The increase was fueled by eight new projects that became operational in 2016. Another seven new projects are due online this year in a move expected to generate an average production of 207 million barrels per day in 2017 and 1.9 million barrels per day in 2018, the report stated.
Increased U.S. production has been more than offset in recent months by slower production in other parts of the world. Still, the country’s storage levels have increased. U.S. oil storage decreased 2.2 million barrels this week to about 533 million barrels. The level is up 28.1 million barrels from 505 million barrels one year ago.
Varying global oil production and storage reports have been key factors in oil prices in recent months, although price projections vary widely.
Again, we should get a better sense of what executives are expecting when they give their quarterly earnings reports.
The government projection shows the price average holding steady this year.
Domestic benchmark West Texas Intermediate crude likely will average about $52 in 2017 and $55 in 2018, the EIA said this week. The price gained 7 cents Thursday to close at $53.18, up $1.48 from one week ago.