Oil: It’s Not Just US Output That’s Ramping — It’s Exports, Too
One of the most contentious debates you can have with an oil trader these days is about U.S. production. Many “long crude”, the market parlance for those betting on higher prices for a barrel, simply refuse to swallow the government line that output, which was virtually unchanged for over a year, had suddenly jumped a half million barrels per day in one week — and growing since.
The “government” here is the Energy Information Administration, or EIA, the statistical arm of the U.S. Department of Energy, or DoE, that issues the Weekly Petroleum Status Report and a load of other publications such as the monthly Drilling Productivity Report and Short-Term Energy Outlook. The EIA’s plethora of consistent and timely energy reports arguably make it the world’s most closely-followed authority on the subject.
In its latest Weekly Petroleum Status Report, the EIA projected U.S. crude output at 12.8M barrels per day during the week ended Aug. 18. That was the agency’s highest estimate since the record 13.1M barrels that the United States produced daily before the coronavirus outbreak in March 2020.
That 12.8M, by the way, was the culmination of three weeks of reporting, where the EIA had raised its production estimate by 100,000 barrels each week under a new reporting methodology. How it works is that the agency is getting a higher count for crude flowing from active oil wells compared with those that are drilled but uncompleted — the latter referred to as DUCs.
Thus, the revisions imply that drilling-rig productivity has been higher than past estimates despite the U.S. oil rig count itself having fallen by more than 15% this year.
“Earlier this year the EIA revised the number of drilled but uncompleted wells in the top U.S. shale
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