USA oil heads to Middle East in latest sign of shale’s spread

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Energy Information Administration (EIA) of the U.S. Energy Department estimates that U.S. oil production this year will average 10.59 million barrels per day, in 2019 – 11.18 million barrels per day. A year ago at this time, a gallon of regular gasoline cost $2.266 on average in the United States.

Crude imports fell by 538,000 bpd to 7.89 million bpd for the week ending February 2, and commercial crude stocks slightly rose 1.9 million bpd to 420.3 million, the EIA data said.

Although Wall Street stocks recorded their biggest intraday drop since 2011 on Monday and measures of volatility hit multi-year highs, oil has not been as disturbed as one would think.

This is not the worst prediction for the future of WTI so producers should still be competitive at this price and it may ultimately make many shale players re-think their financials.

For most of 2017, China’s crude oil imports exceeded those of the US on a monthly basis. SP Global Platts’ analyst expected a 2.8-million-barrel increase. Bank sees the price of Brent reaching $75 per barrel within three months, lifting its short-term oil price projection from the previous $62 forecast. Ed Morse of Citicorp recently remarked, “2018 could turn out to look a lot like 2014 – a year that started with very high prices and ended at very low prices”.

The UAE produced around 2.87 million bpd of crude oil in January, in line with its production quota under the OPEC supply cut deal.

So it seems this is really happening – the USA independent or nearly independent – of traditional oil producers like Venezuela, Nigeria and even Saudi Arabia by year’s end – exporting to some of those place too – who’d have thought it possible just five or ten year’s ago?

The EIA said November U.S. production rose to 10.038 million bpd, even though less-reliable weekly figures released at the time were far short of that number. However, another data from API showed a decline of 1.1 million barrels.

China imported 8.4 million barrels a day (b/d) of crude oil, compared to the 7.9 million b/d imported by the United States. The upshot? As long as oil doesn’t fall under $40 (which it won’t do because the demand for it is too solid), then United States shale will be “fine”. Inventories are up for a second week in a row, a common occurrence for this time of year, with nothing notable shown after 10 weeks of substantial decline.

The API was said to report US crude stockpiles slid 1.05 million bbls last week, with storage also shrinking at tanks in the key hub of Cushing, Okla.

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The US government forecasts that the nation’s production will climb to 11 million barrels a day by late 2019, a level that would rival Russian Federation, the world’s top producer.

Iran plans to increase oil production capacity by 700,000 bpd within 4 years

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