This issue of JPT offers two suggestions as to why crude oil prices may not rise significantly in the near future. The role of unconventional production becoming the industry’s “swing producer” in reaction to oil prices is laid out in this month's Management column (see also Comments, March 2015 JPT). And the continued strength of Permian Basin output is described in this month's article Shift Toward Permian Drives Rising Rig Count.
Although global crude oil production has declined in some regions since the collapse in oil prices began, and there have been massive cuts in company spending, world output has remained stubbornly resilient. Global petroleum production rose in 2015 and 2016, and is projected to rise slightly in 2017, according to the US Department of Energy’s Energy Information Administration (EIA) Short-Term Energy Outlook, published in September.
US crude oil production averaged 9.4 million BOPD in 2015 and is forecast to average 8.8 million BOPD this year and 8.5 million BOPD in 2017. The US production forecast is 0.2 million BOPD higher than one the EIA made in August as it cited an uptick in drilling activity, rig efficiency, and well productivity.
The steep decline in North American rig activity over the past year came primarily from the onshore light tight oil sector, which has short development cycles that allow producers to react quickly to price signals. Production from the US Gulf of Mexico is expected to reach record highs next year due to previous big deepwater discoveries.
Beginning with this issue, the World Crude Oil Production table in the Performance Indices page will include fewer countries. The table lists the monthly crude oil production numbers from the EIA. Ongoing work on the EIA’s website is disrupting the regular updating of some countries’ production numbers. This has been going on for several months, which is causing considerable delays in our reporting of this information. EIA recently launched the redesign of its International Energy Portal at http://www.eia.gov/beta/international and is currently beta testing it.
Over the years, our readers have indicated that they use the Performance Indices to gather data for their research and analyses. Therefore, we decided not to source production data from another provider in order to preserve the continuity of data for our readers. Other reporting services use different methodologies to collect production information.
In this issue of JPT and going forward, crude oil production data (crude oil including lease condensate) will be sourced from the EIA’s Monthly Energy Review. The Review includes statistics on total energy production, consumption, and trade; energy prices; overviews of petroleum, natural gas, coal, electricity, nuclear energy, renewable energy, and international petroleum; carbon dioxide emissions; and data unit conversion values. It is available at http://www.eia.gov/totalenergy/data/monthly/, including historical data back to October 1974.
John Donnelly, JPT Editor
07 September 2016