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Page added on March 19, 2014
U.S. Crude Production Jumps to Highest Level Since 1988
U.S. crude-oil production rose to the highest level in almost 26 years last week as imports declined, the Energy Information Administration reported.
Output increased 33,000 barrels a day in the week ended March 14, or 0.4 percent, to 8.215 million, the most since May 1988, said the EIA, the Energy Department’s statistical arm. Production has jumped 15 percent from a year earlier as a combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies trapped in shale formations in North America.
“Shale crude is really a great bright spot,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “We are going to see more oil production in the U.S. and less imports.”
Crude imports fell to 7.192 million barrels a day in the four weeks ended March 14, the lowest level since January 1997, according to EIA data. The U.S. met 86 percent of its energy needs in the first 11 months of 2013, the highest level since 1986, EIA data show.
Production will rise to 9.16 million barrels a day next year, the EIA forecast in its monthly report on March 11. The record is 9.6 million in 1970.
West Texas Intermediate crude futures rose 17 cents to $99.87 a barrel at 11:48 a.m. on the New York Mercantile Exchange. Prices have climbed 1.5 percent this year.
8 Comments on "U.S. Crude Production Jumps to Highest Level Since 1988"
Davy, Hermann, MO on Wed, 19th Mar 2014 7:31 pm
Bloomberg you are invited to the retirement party. BYO because we anticipate shortages.
Northwest Resident on Wed, 19th Mar 2014 8:49 pm
hey rockman — Back in the good old days of oil drilling/pumping, did they call the stuff obtained from shale plays via fracturing methods “crude”, or did they call it something else back then? These days of course, “crude” includes conventional oil, unconventional oil, and I think even corn ethanol.
HARM on Wed, 19th Mar 2014 9:03 pm
Great news! This means the Peak Oil schadenfreude party can be called off indefinitely now, right… right?
Newfie on Thu, 20th Mar 2014 1:20 am
I headed out to buy a new Hummer on credit after I read this. The future is so bright it is blinding (heh heh).
GregT on Thu, 20th Mar 2014 4:42 am
Well this certainly IS good news, let’s all party like there’s no tomorrow…………..
rockman on Thu, 20th Mar 2014 1:28 pm
NR – Despite the effort to rebrand the names the oil patch has never used the term “unconventional” or “tite” OIL. We have unconventional and tite RESERVOIRS that can produce light or heavy oil as well as condensate and NG. An unconventional fractured reservoir, be it made of shale, sandstone or limestone, can produce light, heavy, sweet or sour oil. The nature of the fluid doesn’t define the reservoir…the nature of the porosity and permeability of the reservoir does that.
And the whole nomenclature – crude…oil…condensate – can get confusing. For instance some folks think “condensate” isn’t oil…it is. And they think the distinction between oil and condensate is strictly based upon the gravity (weight) of the fluid…it isn’t. There is a rough correlation but it isn’t fixed. A well producing a liquid hydrocarbon in La. might be classified as oil in that state and a well producing the exact same liquid in Texas could be classified as condensate.
And to make it even more confusing the liquid hydrocarbon coming out of a well in Texas might be classified (and reported) as condensate initially and then some years later the production could be classified as oil when the reservoir pressure declines. This is a critical distinction because the different classifications can have a big impact on future well spacing. So the same well might show X bbls of oil and Y bbls of condensate. And just to make it more confusing sometimes Texas will report all the production from a well as “oil” even though it might be technically classified as condensate. But that isn’t considered a big issue here because condensate is oil.
As far as corn ethanol et al those are products. We don’t produce such from our wells…just oil, condensate, NG, water and on rare occasions CO2. Likewise GTL and coal to liquid aren’t anything we upstream types deal with. That the venue of the refinery alchemists. LOL.
Nony on Thu, 20th Mar 2014 1:58 pm
NR:
Bakken oil is almost identical with “light, sweet” WTI. It is low sulfur and 40 API. In fact, it’s exactly the form of oil that peakers said new ventures would NOT come up with (back in 2005).
You all saw the sands and also saw the growing fraction of heavy crude from overseas and said any new oil would be dirty or not as good. But that Bakken oil, while expensive to drill, is exactly the kind of oil that markets prefer.
Eagle Ford oil is more variable and some of it can be “too light”.
Bottom line: Rock is right to emphasize the different issues (source versus type). Bakken oil is expensive and marginal in how you get it (long horizontals, 30 stage fracks) compared to big easy traps (pools of liquid under domes). But chemically, Bakken oil is “good” normal oil. Really. You all look like conspiracy theorists and doomers when you refuse to face the facts on things like that.
Take your victories with things like high price. But don’t be blinded to facts that don’t go your way.
***
Biodiesel or NGL are more different than crude. From a user standpoint, biodiesel pretty much matches one of the main products of crude…so economically it might be considered in the same class. However, if it’s subsidized, you have to be concerned with how sustainable or meaningful it is when thinking about crude running out. But it will keep prices down (versus not having it).
NGL, I would argue should be separated. It’s mostly from gas (yes, some comes from crude). And it’s not the main desired product of crude. Also, more and more it is starting to trade (price) like gas rather than like crude.
http://marketrealist.com/2013/03/why-ethane-stopped-trading-like-crude-and-started-trading-like-nat-gas-part-i/
Net/net: separate NGL and biofuel depending on your purpose. But separating out shale oil is just biased.
Northwest Resident on Thu, 20th Mar 2014 7:57 pm
rockman — Thanks for the info. Yeah, that all makes sense, sort of…:-)
But one thing we do know for sure and that is, the U.S. Crude Production Jump to Highest Level Since 1988 is due almost entirely to unconventional sources. And like everything else, what jumps up must eventually come back down — and with unconventional oil plays, the “down” part comes rather quickly. Enjoy the jump while it lasts, I suppose.