Interesting API figures below show extremely low US production. (lowest in 50 years). The SPR purchases will have an impact. The DOE figures of a 1.7 million bbl inventory drawdown is 5 million less than the analyst estimate of 3.9 million increase. Who knows what the real API numbers are this week (i.e., 2 million bbl or 6 million increase)- but either way there is a decrease for the last two weeks versus a forecasted significant increase. The trend is decreasing production in a big way. This will accelerate when the huge capex cuts are fully implemented in 1999. There are a lot of meetings with OPEC and non-OPEC members to garner support for a cut in March. My guess is that supply will be significantly less than demand sooner rather than later.
WASHINGTON, February 17 -- United States crude oil
production in the lower 48 states in January was about 4.8
million barrels per day (b/d), the lowest output in more than
50 years and an estimated 6 percent decline from January
a year ago, the American Petroleum Institute reported
today. In Alaska, which accounts for one-fifth of all U.S.
production, January's drop was substantially larger than
usual at 15 percent--or 180,000 fewer barrels b/d--when
compared to January 1998. Over the past four years,
Alaska's decline has averaged 5 to 8 percent annually and
currently its output is more than 60 percent below its
March, 1988, peak of nearly 2.1 million b/d.
API's Monthly Statistical Report said the current, lowest
inflation-adjusted crude oil prices since the Great
Depression of the 1930s have resulted in shut-in wells and
delayed projects that led to the production declines.
In an accompanying analysis of recently released federal
employment data, the Report said 11,500 people in the
domestic oil and natural gas production industry lost their
jobs in the month of January. This employment decline of
3.7 percent was the largest one-month drop since 1986,
the Report said. Just since the end of 1997, the industry
has lost 42,000 jobs, a drop of more than 12 percent, API's
report said. The Report estimated that the wellhead prices oil producers received in January averaged just $9 per barrel, down 33 percent from January 1998, and a nearly 60 percent decline
from January 1997. Compared to a year ago, drilling rig
activity fell more than 40 percent, with only 125 rigs
searching for U.S. oil this January, about one-third of the rig
activity in January 1998, the API Report said.
Total imports in January – crude oil and petroleum products
-- were 9.785 million b/d, a 1.1 percent decline from year
ago levels. Imported crude oil averaged 8.010 b/d, a decline
of 2.1 percent compared to January 1998. Other highlights of the January report:
-- Gasoline deliveries (a key measure of demand) rose
7.973 million b/d in January for a 5 percent increase
compared to January a year go. Also bolstering 1998
growth in gasoline consumption were record low
inflation-adjusted retail gasoline prices, with the most
recent a roughly 25 percent decrease from average retail
levels of 1996 and '97.
-- January's distillate deliveries of 3.693 million b/d were up 3.6 percent over January 1998.
-- Kerosine jet fuel deliveries jumped 6 percent, but the
January to January comparison would have been somewhat
lower had the January '98 deliveries not been so unusually
low.
-- Residual fuel deliveries of 796,000 b/d were down 10
percent compared to January 1998.
-- January natural gas liquids production of 1.732 million b/d was down 5.1 percent from last year's levels.
-- Distillate stocks of 149.3 million barrels were 12.2
percent higher than at the end of January '98.
-- Gasoline inventories were 226.9 million barrels, a 2.7
percent increase from last January.
-- Crude oil stocks of 330.2 million barrels rose 2.9 percent
in January '99 compared to a year ago. And total stocks of
all oils were 1,076,500,000 barrels at the end of January
'99, a 0.7 percent decline compared to January '98.
For additional information, please contact Chris Kelley at
202/682-8181 |
