U.S. Crude Output Hits Record 10.96mb/d
U.S. crude oil production rose 269,000 barrels per day (bpd) to a record 10.964 million bpd in July, led by record output from Texas and North Dakota, the U.S. Energy Information Administration said in a monthly report.
The agency revised its June production figure slightly higher to 10.695 million bpd in June.
U.S. crude production has surged thanks to a shale boom and now rivals top producers Russia and Saudi Arabia.
Oil production in Russia averaged 11.347 million bpd between Sept. 1 and Sept. 27 and was on track to reach another post-Soviet high, an energy sector source told Reuters. Saudi Arabia meanwhile, produced about 10.4 million bpd in August.
Saudi Arabia is concerned that rising U.S. shale production over the next year could create another glut, especially if a stronger dollar and weaker emerging market economies reduce global demand for oil.
Production in Texas inched higher to a record 4.47 million bpd and output from North Dakota also hit a peak, rising by 41,000 bpd to 1.26 million bp, EIA data showed.
Still, the rate of production growth in the Permian basin, the biggest U.S. oilpatch which spans Texas and New Mexico, is slowing amid transportation bottlenecks as pipelines have filled.
Drilling companies cut oil rigs for a second consecutive week as new drilling stalled in the third quarter with the fewest additions in a quarter since 2017, data showed.
Total U.S. oil demand was up 3 percent in July compared with last year, driven by strong demand for distillates, EIA data shows.
Distillate demand jumped 6.8 percent, or 251,000 bpd, in July year-on-year, while gasoline demand was up 0.7 percent, or 67,000 bpd, in July compared with last year, EIA data showed.
Meanwhile, natural gas production in the lower 48 U.S. states rose to an all-time high of 92.7 billion cubic feet per day (bcfd) in July, up from the prior record of 90.9 bcfd in June, according to EIA’s 914 production report.
Output in Texas, the nation’s largest gas producer, increased to 24.6 bcfd in July, up 1.5 percent from June. That was the most since April 2016.
In Pennsylvania, the second biggest gas producing state, production rose to a record high 17.0 bcfd in July, up 3.0 percent from June. That compares with output of 14.7 bcfd in July 2017.
2----U.S. Oil Drillers Add Fewest Rigs
U.S. energy companies cut oil rigs for a second consecutive week as new drilling stalled in the third quarter with the fewest additions in a quarter since 2017 due to pipeline constraints in the nation’s largest oil field.
Drillers cut three oil rigs in the week to Sept. 28, bringing the total count down to 863, General Electric Co’s Baker Hughes energy services firm said in its closely followed report.
For the third quarter, the increase of five oil rigs was the smallest since drillers cut three rigs in the fourth quarter of 2017. They added 50 rigs in the first quarter and 61 rigs in the second quarter of 2018.
For the month of September, meanwhile, the oil rig count was up one, the same rise as in August.
The U.S. rig count, an early indicator of future output, is higher than a year ago when 750 rigs were active as energy companies have been ramping up production in anticipation of higher prices in 2018 than previous years.
The rig count has held mostly steady since June as spot crude prices in the Permian region in western Texas and eastern New Mexico WTM- WTC-WTM have collapsed due to a lack of pipeline infrastructure needed to transport more fuel out of the region.
On a quarterly basis, drillers in the Permian are still adding rigs, but the pace of those additions has slowed each quarter this year to just 13 added in the third quarter from 31 in the second quarter and 44 in the first quarter.
Production in the Permian is forecast to rise to 3.5 million barrels per day in October, just below output from Iran, OPEC’s third largest producer.
More than half the total U.S. oil rigs are in the Permian, the country’s biggest shale oil formation..
Overall, U.S. oil production rose to a record high 11.0 million bpd in July, according to federal data, rivaling output from top producers Russia and Saudi Arabia.