Tag Archives: EIA

Data Watch: US and Global Crude Oil Monthly Production April 2014 Releases

On April 30th, the U.S. government agency The Energy Information Administration (EIA) announced provisional U.S. crude oil production figures for February 2014. Key points:

  • February crude oil production was 224.9 million barrels, equivalent to 8.0 million barrels per day (bpd)
  • Change over February 2013 on a barrel-per-day basis: +12.8% y/y
  • February total crude oil plus natural gas liquids reached 300.0 million barrels, equivalent to 10.7 million bpd
  • Growth continues to remain in the double digits year-on-year.

As can be seen from the chart below (click for larger image, link to original data here), the fracking of tight oil formations in the U.S. has made a major impact on U.S. crude production over the last few years.

US Field Crude Oil Production April 2014 jpeg

Given crude oil is a globally traded commodity, U.S. production numbers need to be placed in the context of world supply and demand. The International Energy Agency (IEA), in its latest Oil Market Report (OMR) dated 11 April 2014, recorded global ‘all liquids’ (oil and condensate) production of 91.8 million bpd for March 2014. Year-on-year supply growth is averaging around 1 million bpd, or a little over 1%.

OPEC and Non-OPEC Oil Supply March 2014 jpeg

Mirroring supply, benchmark crude prices continue to bump along a plateau. Increased U.S. production is being offset by a reduction in OPEC output, particularly with respect to Libya and Iraq. As a result, both WTI and Brent have remained above $100 per barrel.

Crude Futures March 2014 jpeg

Full quarterly IEA world supply-and-demand figures, including 2013 provisional supply and demand numbers, together with 2014 forecasts, can be found here. Interestingly, 2013 supply is now given as averaging 91.6 million bpd, up only 0.6 million bpd from 2012. Successive articles in the media have pronounced peak oil dead due to the fracking of shale. This story is everywhere—except in the actual numbers, where almost no increase in supply can be seen.

Data Watch: US Natural Gas Monthly Production December 2013

The US government agency the Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on February 28th, and covers the period up until end-December 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • December 2013 natural gas dry production: 2,090 bcf, plus 2.1% year-on-year
  • Average monthly production for the 12 months to December 2013: 2,023 bcf, +0.9% over the same period the previous year

Since the end of 2011, production growth has stalled (click chart below for larger image), with the year-on-year 12-month average bumping along a plateau.

US Dry Gas Production Dec 13 jpeg

Natural gas well-head prices exhibit seasonality, with winters generally seeing stronger prices due to heating needs. The recent polar-vortex induced cold snap in the U.S. has pushed prices up to their highest since February 2010 (here, click for larger image).

Natural Gas Spot Prices Mar 3 jpeg

To put the current price of $5.0 per million British thermal uni (Btu) in perspective, a longer term monthly time series going up until end December 2012 is given below (click for larger image). Note that natural gas production is very inelastic over the short term. Accordingly, the market is brought back into equilibrium during periods of strong demand through large jumps in price. However, these don’t generally prompt an investment surge in natural gas infrastructure since they are viewed as temporary in nature. Only if prices remain elevated beyond winter would we likely see a supply-side response. However, prices are already coming off their highs as we move toward spring.

US Nat Gas Well Head LT jpeg

Data Watch: US and Global Crude Oil Monthly Production February 2014 Releases

On February 27th, the U.S. government agency The Energy Information Administration (EIA) announced provisional U.S. crude oil production figures for December 2013. Key points:

  • December crude oil production was 243.8 million barrels, equivalent to 7.9 million barrels per day (bpd)
  • Change over December 2012 on a barrel-per-day basis: +11.1% y/y
  • December total crude oil plus natural gas liquids reached 324.8 million barrels, equivalent to 10.5 million bpd

The last three months have seen a sharp drop in production growth rates from the high teens to just over 10%. It is too early to tell if this is just a temporary blip or something more permanent.

As can be seen from the chart below (click for larger image, link to original data here), the fracking of tight oil formations in the U.S. has made a major impact on U.S. crude production over the last few years.

U.S. Field Production of Crude Oil Jan 14 jpeg

Given crude oil is a globally traded commodity, U.S. production numbers need to be placed in the context of world supply and demand. The International Energy Agency (IEA), in its latest Oil Market Report (OMR) dated 13 February 2014, recorded global ‘all liquids’ (oil and condensate) production of 92.1 million bpd for January 2014. Year-on-year supply growth is averaging around 1 million bpd, or a little over 1%.

OPEC and Non-OPEC Oil Supply Jan 14 jpeg

In this month’s OMR, the IEA emphasises that exuberant expectations with respect to the impact of U.S. production on world supply and demand have been disappointed. Outages in Libya, disappointing production in Iraq and higher-than-expected OECD demand have more than offset increased U.S. output (click for larger image).

Glut jpeg

As a result, benchmark crude prices continue along an elevated plateau.

Benchmark Crude Prices jpeg

Full quarterly IEA world supply-and-demand figures, including 2013 provisional supply and demand numbers, together with 2014 forecasts, can be found here.

Data Watch: US Natural Gas Monthly Production November 2013

The US government agency the Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on January 31st, and covers the period up until end-November 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • November 2013 natural gas dry production: 2,047 bcf, plus 2.4% year-on-year
  • Average monthly production for the 12 months to November 2013: 2,020 bcf, +0.8% over the same period the previous year

Since the end of 2011, production growth has stalled (click chart below for larger image), with the year-on-year 12-month average bumping along a plateau.

US Dry Gas Production Nov 13 jpeg

Natural gas well-head prices exhibit seasonality, with winters generally seeing stronger prices due to heating needs. The recent polar-vortex induced cold snap in the U.S. has pushed prices up to their highest since February 2010 (here, click for larger image).

Natural Gas Spot Prices Jan 14 jpeg

To put the current price of $5.5 per million British thermal uni (Btu) in perspective, a longer term monthly time series going up until end December 2012 is given below (click for larger image). Note that natural gas production is very inelastic over the short term. Accordingly, the market is brought back into equilibrium during periods of strong demand through large jumps in price. However, these don’t generally prompt an investment surge in natural gas infrastructure since they are viewed as temporary in nature. Only if prices remain elevated beyond winter would we likely see a supply-side response.

US Nat Gas Well Head LT jpeg

Data Watch: US Natural Gas Monthly Production October 2013 Plus a Review of EIA’s Medium- and Long-Term Forecasts

Apologies for the late reporting of this number; my brain has been occupied with job-eating robots and computers for the last few weeks (and another post on this theme to come).

Apart from getting the latest monthly US natural gas number, I also want to do a quick catch up on The Energy Information Administration (EIA)’s “Annual Energy Outlook 2014″, which came out in mid-December and the “Short Term Energy Outlook” that came out on January 7th with new 2015 numbers.

But first the monthly number: the US government agency the EIA issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on January 7th, and covers the period up until end-October 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • October 2013 natural gas dry production: 2,007 bcf, plus 0.6% year-on-year
  • Average monthly production for the 12 months to October 2013: 2,015 bcf, +0.7% over the same period the previous year

Since the end of 2011, production growth has stalled (click chart below for larger image), with the year-on-year 12-month average now flat-lining.

US Dry Gas Production Oct 2013 jpeg

Natural gas well-head prices exhibit seasonality, with winters generally seeing stronger prices due to heating needs. The recent polar-vortex induced cold snap in the U.S. has also been supporting prices over recent weeks (here, click for larger image).

US Nat Gas Spot Prices Jan 14 jpeg

To put the current price of $4.5 per million Btu in perspective, a longer term monthly time series going up until end December 2012 is given below (click for larger image). Continue reading

Data Watch: US Natural Gas Monthly Production September 2013

The U.S. government agency The Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on December 12 and covers the period up until end-September 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • September 2013 natural gas dry production: 1,989 bcf, minus 0.2% year-on-year
  • Average monthly production for the 12 months to September 2013: 2,014 bcf, +0.8% over the same period the previous year

Since the end of 2011, the rate of production increase has rapidly decreased (click chart below for larger image).

US Dry Gas Production Sep 13 jpeg

The uptick in natural gas prices associated with the rapid deceleration in natural gas production growth has, rather surprisingly, rolled over, probably due to the increased competitiveness of coal. Prices paid by electricity utilities are back near $4 (I prefer this indicator since ‘well head’ prices are reported with a large lag). This price level is unlikely to sustain a new round of rig investment.

NatGas

Much recent media attention has centred on a so-called shale-gas revolution in the United States and, in particular, the ability of shale gas to boost overall volume of natural gas production. Many claims are made with respect to the prospective expansion in shale gas production in the coming years including the following:

  • Shale gas will provide a low-cost source of natural gas, and thus cheap energy, for decades to come. This, in turn, will boost the competitiveness of the U.S. economy.
  • The U.S. will move toward an era of energy self-sufficiency, which will help buttress the country’s geopolitical security.
  • The scale of shale gas production will be sufficient to allow the U.S. to commence natural gas exports, thus transforming energy markets outside of the U.S. such as those in Europe.
  • Increased natural gas production in the U.S. will mitigate carbon emissions through displacing coal and so reduce the risk of dangerous climate change.

I have blogged extensively on these claims (some repeated by President Obama) hereherehere and here.

For these claims to be substantiated, significant year-on-year rises in U.S. natural  gas production will be required over an extended period. Through tracking monthly production of natural gas, a non-specialist can confirm or refute whether large rises in natural gas production are being achieved and, therefore, whether the claims associated with a shale-gas revolution are credible. In short, the monthly numbers allow you to evaluate the hype. Monthly data are currently not showing any material increase in production.

Data Watch: US and Global Crude Oil Monthly Production November Releases

On November 27th, the U.S. government agency The Energy Information Administration (EIA) announced provisional U.S. crude oil production figures for September 2013. Key points:

  • September crude oil production was 233.8 million barrels, equivalent to 7.8 million barrels per day (bpd)
  • Change over September 2012 on a barrel-per-day basis: +18.6% y/y
  • September total crude oil plus natural gas liquids reached 315.0 million barrels, equivalent to 10.5 bpd

As can be seen from the chart below (click for larger image, link to original data here), the fracking of tight oil formations in the U.S. has made a major impact on U.S. crude production over the last few years. The critical question is whether the current large year-on-year percentage growth rates in oil production can be sustained. On the current trajectory, the US is set see production pass its peak of the 1970s.

US Field Production of Crude Oil jpeg

Growth rates for both crude oil production by itself and crude plus natural gas liquids remain robust, continuing to track in the high teens. The situation for oil is in marked contrast to that of U.S. natural gas, where production growth has stopped.

The differentiator here is price. Both tight gas and tight oil are expensive to produce compared with the conventional alternatives. Accordingly, production investment requires a high product price to remain feasible. U.S. natural gas prices are down roughly by half from their average level in the 2005 to 2008 period (removing the temporary 2008 spike). By contrast, the price of West Texas Intermediate, the U.S. benchmark oil price, remains near all-time highs (again excluding the very short-term 2008 spike).

Given crude oil is a globally traded commodity, U.S. production numbers need to be placed in the context of world supply and demand. In its latest Oil Market Report dated 14 November 2013, the International Energy Agency (IEA) recorded global ‘all liquids’ production of 91.8 million bpd for October 2013.

OPEC and Non-OPEC Oil Supply jpeg

Full quarterly IEA world supply-and-demand figures, including Q3 2013 supply estimates, can be found here.

Prices have eased in recent weeks after the threat of a military strike against Syria was removed. Moreover, the detente between the US and Iran has also opened up the prospect of more Iranian crude coming on to global markets in 2014.