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Page added on June 6, 2017
US oil output poised to hit 10 million barrels a day next year, breaking 1970 record
The U.S. Department of Energy on Tuesday signaled it is now more confident that U.S. oil production will rise to 10 million barrels a day next year, the highest average annual level on the books.
The department’s Energy Information Administration forecast output would surge to the historic level in 2018 after last month projecting the country would produce just shy of 10 million barrels a day next year. The previous record average was 9.6 million barrels a day in 1970.
“Increased drilling activity in U.S. tight oil basins, especially those located in Texas, is the main contributor to oil production growth, as the total number of active rigs drilling for oil in the United States has more than doubled over the past 12 months,” EIA acting Administrator Howard Gruenspecht said in a statement.
The revision is another sign that U.S. drillers are taking full advantage of higher oil prices buoyed by OPEC‘s deal with crude exporters to limit production in a bid to shrink a global oversupply. Output in the American oil patch has surged about 9 percent to 9.3 million barrels over the last eight months.
Throughout a nearly three-year downturn, American oil companies have driven down the cost of advanced drilling methods, allowing them to pump profitably, even with U.S. West Texas Intermediate crude trading between about $45 and $55 a barrel — roughly half of peak 2014 prices.
The EIA revised down its outlook for prices in 2018 on Tuesday, raising the prospect that U.S. drillers might have to live with thinner profit margins next year.
The agency now sees WTI averaging $53.61 a barrel next year, down 2.7 percent from a forecast of $55.10 in last month’s short-term energy outlook. It also revised down its price expectation for international benchmark Brent crude by 2.6 percent.
The EIA left its forecast for this year’s production unchanged at 9.3 million barrels a day. It slightly upped its outlook for average WTI and Brent prices in 2017 by about 10 cents.
29 Comments on "US oil output poised to hit 10 million barrels a day next year, breaking 1970 record"
Anonymous on Tue, 6th Jun 2017 8:16 pm
If we cross 10MM bpd at $50 oil, there are some peak oilers that need to eat some major crow.
Colin Campbell, Stuart Staniford, James Hamilton, Matt Savinar, Deffeyes, as well as the whole defunct TOD website. I will give Matt Simmons a pass since he drank-drowned and Mike Ruppert since he literally blew his brains out.
Anonymous on Tue, 6th Jun 2017 8:16 pm
Maybe Mason Inman can take his turn in the barrel too.
Anonymouse on Tue, 6th Jun 2017 8:17 pm
Go back to your old handle Nony. Sock-puppeting yourself is kind of pathetic…
Apneaman on Tue, 6th Jun 2017 8:58 pm
Anonymous, so what you are saying is something is true or false based on how popular it appears.
Argumentum ad populum
Logical fallacy
“Eat shit. Twenty trillion flies can’t be wrong.”
—Bill Maher[1]
Argumentum ad populum (“argument to the people”) is a logical fallacy that occurs when something is considered to be true or good solely because it is popular. Undoubtedly many popular notions are true, but their truth is not a function of their popularity, except in circumstances where other factors ensure that popularity correlates with truth. The fallacy is the opposite of an appeal to the minority
http://rationalwiki.org/wiki/Argumentum_ad_populum
This logical fallacy was written about by the ancient Greeks 2500 years ago. Guess you are just hearing about it now eh?
Retards like you are indisputable proof that the public education system is the biggest single mis-allocation of resources in history and not suburbia as Kuntstler maintains. At least suburbia was useful for a minute.
Northwest Resident on Tue, 6th Jun 2017 9:21 pm
It is amazing how much oil American companies have been able to squeeze out of the ground, enabled by virtually unlimited debt accumulation and suppressed interest rates. It’s almost like the American oil industry has its very own unlimited-balance credit card at near zero percent interest rate. As long as the financial, propaganda and “investment” channels keep funneling billion$ into American oil production, then sure, we’ll be seeing sky-high production (relatively speaking).
Party on! Max that credit card out! You’ll never pay it back anyway (and you KNOW it). Party like there’s no tomorrow.
Go Speed Racer on Tue, 6th Jun 2017 10:18 pm
Maybe Mr Rockman can explain it to us.
Is this tanker loads of underground paint thinner?
Is it about to peak out and decline?
Did they just finish drilling all the good spots?
Is it all drilled using credit money that won’t be paid back?
_______________________________ on Tue, 6th Jun 2017 11:33 pm
How much btus are being used and how much are being returned and how much of the companies are able to pay their debt? Ethanol production is probably a record too. doesn’t mean shit
Anonymous on Tue, 6th Jun 2017 11:55 pm
How many TOD prognosticators predicted this?
AHAHAHAHAHA!
joe on Wed, 7th Jun 2017 1:05 am
Bau advocates are just as myopic. They are not paying attention to the fact that oil only flows now cause armed men now protect what’s left in the middle east and the financial system monetised the excessive effort involved in getting oil.
As for those who think no models predicted the rise of tight oil, I say that’s not true. Peak oil models simply say this, that easy oil drying up/scarcity will drive up the price and that tight oil will come in and the cost of that will become excessive with society facing increasing social costs of using oil untill we don’t and easy is all used up. Right now we have Saudi Arabia blockading Qatar cause they gave a billion dollars to a Shia group who were smart enough to kidnap members of the Qatari royal family that went on a sight seeing tour of war – torn Iraq. All the Arab nations support terrorism, and Trump lying that Saudis are doing somthing about terror funding will cause America to lose the WoT.
GregT on Wed, 7th Jun 2017 1:23 am
I second Anonymouse’s comment above. You are a pathetic excuse of a human being Nony/ Papa Smurf/ Econ 101 / Anonymous.
A complete loser.
Davy on Wed, 7th Jun 2017 5:29 am
“You are a pathetic excuse of a human being Nony/ Papa Smurf/ Econ 101 / Anonymous.”
You are the complete loser Greg, You don’t know if that was Nony. Besides Nony contributes far better info than you ever do. You rarely say anything and when you do you are pricking people. I would expect you to second your friend mouse because mouse is an asshole Canadian just like you and you guys are peas in a pod with your delusional anti-American hatred.
Anonymous on Wed, 7th Jun 2017 7:39 am
Davy,
Thanks for sticking up for me. I know we don’t see eye to eye on the topic, but I appreciate the kindness as a person discussing things.
P.s. I did gloat just a little. 😉
Plantagenet on Wed, 7th Jun 2017 1:33 pm
The concept of peak oil remains valid. Like any finite resource, oil production has limits.
However Hubbert’s prediction that US production would peak in 1970 and then inexorably decline and Campbell’s prediction that global production would peak in 2005 and then inexorably decline have been proven wrong.
Cheers!
Hello on Wed, 7th Jun 2017 2:56 pm
Plant: that global production would peak in 2005 and then inexorably decline have been proven wrong.
It’s a matter of averaging and filtering and thus timescale. If we sit back and average the data over maybe a few decades, or a century we’ll end up with a single peak.
rockman on Wed, 7th Jun 2017 3:58 pm
Racer – OK, let’s take it one at a time:
“Is this tanker loads of underground paint thinner?” Are you referring to the surge in condensate/light oil from the shales? If so go back and read all my posts in the “refineries are clogged” thread. Perhaps you’re remembering all the idiotic posts about the condensate/light oil being of limited value. As I’ve explained in GREAT DETAIL with a sh*t load of DOCUMENTATION that oil was (and still is) critical to our refining industry. If we had not produced it we would have had to import it AS WE HAD BEEN DOING FOR YEARS. We need the 40°+ API oils to blend with our heavy oil imports to produce the 32° API blended oil the US refineries DEMAND. Why? Because by using such blends the refineries have been able to keep the gasoline yields constant for the last 23+ years and actually increased the diesel yield significantly during that. All DOCUMENTED in that thread: not bullsh*t statements as so many others have made with NO DOCUMENTATION.
IOW it ain’t f*cking “paint thinner”…it is f*cking OIL critically REQUIRED by our refining industry. LOL.
“Is it about to peak out and decline?” What…the condensate/light oil again? Started to drop but now looks like it coming back some. Ultimately? Time will tell. However much it declines we’ll go to the international market place and buy what we REQUIRE just like we always have.
“Did they just finish drilling all the good spots?” A “sweet spot” is not an absolutes: it’s sweetness is a function of geology AND the price of oil. At $90/bbl we had a lot more sweet spots then we do at $45/bbl. OTOH if prices stayed fixed at $X/bbl for a long enough period the number of sweet spots diminish…geology is in sole control at that point.
“Is it all drilled using credit money that won’t be paid back”. Now that’s the elephant in the room many have acknowledged for a while. Who drills the unconventional reservoirs? Dominated by the public companies. And they can borrow based on their increasing market cap as the boom grows. But when the boom hits the skids borrowing bases disappear. Some gets paid back…some doesn’t. Not the consumers’ problem: money lenders/investors take chances looking for high returns. And if the lose? Too f*cking bad. LOL.
Same thing with shareholders: you buy stock and either make a profit or lose money. No different then any other industry.
rockman on Wed, 7th Jun 2017 4:20 pm
NR – “It’s almost like the American oil industry has its very own unlimited-balance credit card at near zero percent interest rate.” Most unique circumstance in my 40+ years. I vividly remember running economic analysis when we were using libor at 7%-8% + 5 for financing.
But also remember what I posted about recent shale players that had to finance thru “mezzanine bankers” (really finance companies/investors) that could grab a 15% to 20% return and recover much of the loan on the front end. Despite what many believe a lot of shale drilling was done with very expensive borrowed money.
newfie on Wed, 7th Jun 2017 7:10 pm
Clearly Peak Oil Demand is Peak Bullshit.
Anonymous on Wed, 7th Jun 2017 8:51 pm
40-45 API oil trades at a premium to 32 API oil. It is worth more. As proven by price. Above 45 it starts dropping. But also below 40 it starts dropping. But 40-45 is the most desirable grade!
The paint thinner thing has been rebutted about 10 million times here. Including with links to actual middleman price lists. But peakers just refuse to learn from facts. Not about analysis but about belief.
Oh…and the peakers never acknowledge tha vale of low sulfur either.
Oh…and the peakers never acknowledge all the TOD articles and the arguments from the mid-2000s when peakers said we would not find any more WTI!
Anonymouse on Wed, 7th Jun 2017 9:22 pm
We are discovering new nony sock puppets all the time. We havent hit peak sock puppet with you yet have we?
Right nonymous?
Anonymous on Wed, 7th Jun 2017 9:47 pm
Nothing is over until we say it.
https://www.youtube.com/watch?v=q7vtWB4owdE
rockman on Wed, 7th Jun 2017 11:41 pm
A – Actually the peakers had it completely ass backwards. They pointed to the increase in condensate/light oil from the shales instead increasing WTI as a bad thing: PWTI (Peak WTI) = bad for for US refineries. Obviously clueless that the refineries didn’t want 39.6° API WTI…they DEMANDED 32° API. Of which we didn’t not produce enough domestically and much less available by import. What the country was dependent upon was condensate/light oil to blend with the heavy oil imports to make the 32° API oil they demanded. And that included WTI and all the other condensate/light oil production. So it was perhaps 2002 that was the critical peak year…PC-LO…Peak Condensate-Light oil. We hit 215 mm bbls of “condensate” production that year. By 2016 it had increased to 326 mm bbls.
Unfortunately I’ve yet to find the API distribution of US production by year prior to 2015. I suspect “condensate” may not include other light oils that didn’t not condense from production from NG reservoirs. But I did find data showing that the % of IMPORTED oil 40° to 45° decreased to the lowest level in history in 2015: 0.43%. At one time long ago it was over 13%. Likewise oil over 45° fell to just 0.06% that year. At one time it had been over 6%.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=I000000992&f=A
Bottom line the peak they should have focused on was that of the domestic lighter oils needed to blend with our heavy oil imports. PWTI was never an issue in the sense it was just one the oil gravities needed to blend.
IOW the critical domestic production were the oils with an API greater then 32° REQUIRED to blend with the oil less then 32° API. The shale plays provided a surge in those light oils we needed. IOW the implication that some tried to spread around here that the big increase in condensate/light oil from the shales was a sign of the US petroleum industry was heading down the toilet was complete bullsh*t. In reality it was a big boost by not having to import as much of that expensive oil…which would have been more expensive without our shale boom.
The shale plays did provide a delay of not just global PO but more important a delay in US PRO (Peak Refinery Output). Which is exactly why the US is the largest exporter of refinery products in the world.
Compare our refineries running at 90%+ capacity to Venezuela’s refinery run at 16% because it lacks the condensate/light oil to blend with its heavy oil.
Apneaman on Wed, 7th Jun 2017 11:56 pm
http://imgur.com/XcFKzip
Apneaman on Wed, 7th Jun 2017 11:59 pm
marmi nony sucks cock…..his little brother’s.
Anonymous on Thu, 8th Jun 2017 12:17 am
Rock, it’s even simpler than that. Just look at the price sheets. 32 API oil sells for less than 42.
Cloggie on Thu, 8th Jun 2017 1:22 am
marmi nony sucks cock…..his little brother’s.
You mean like your fellow tribesmen do like this:
https://i.ytimg.com/vi/12ce5KJNcsI/hqdefault.jpg
Davy on Thu, 8th Jun 2017 5:19 am
Rock, great explanation. This simple truth is hard for some on the board.
rockman on Thu, 8th Jun 2017 7:23 am
A – “32 API oil sells for less than 42.” As it should: nearly all 32° oil is blended oil made of a combination of more expensive light oil and the less expensive heavy oils. Only 15% of US production is 30°-35° while the light oils above 40° is 52%.
https://www.eia.gov/dnav/pet/pet_crd_api_adc_mbblpd_m.htm
And the heavy oils make up 85% of our imports. A match with our light oils made in heaven. LOL.
As you say the math ain’t complicated. It also explains why the light oil is pricy: without it we couldn’t import the heavy oils.
Davy on Thu, 8th Jun 2017 8:05 am
Shussh Rock, the anti-Americans can’t stand hearing such things.
Anonymous on Fri, 9th Jun 2017 1:26 pm
Internationally 42 sells for more than 32 also. Every region of the world. 40-45 is most valuable stuff. Very easy to refine (less capital required in a refinery) and also is great for blending in some heavy. Above 45, value drops.
But bottom line is that is GREAT oil coming out of the Bakken. Way better than GOM or Cali oil. Good stuff.
Peakers be all boo hoo hoo. Cornies be all ha ha ha.