This is the June 2015 edition of Oil Production Vital Statistics. The May 2015 Vital Statistics is here. EIA oil price and Baker Hughes rig count charts are updated to end May 2015, the remaining oil production charts are updated to April 2015 using the IEA OMR data.
- World total liquids production up 460,000 bpd to 95.7 mbpd
- OPEC production up 160,000 bpd to 31.21 mbpd (C+C)
- N America production down 250,000 bpd to 19.55 mbpd
- Russia and FSU down 10,000 bpd to 14.05 mbpd
- Europe down 20,000 bpd to 3.45 mbpd (compared with April 2014)
- Asia down 149,000 bpd to 7.86 mbpd
- The mismatch between regional production losses and gains compared with the global number is probably buried in the IEA revisions which are backdated up to 3 months. All that can be said is that over the last 3 months production has grown within each region and globally.
- The fall in US oil rig count is slowing but still falling. The US total rig count stood at 1 rig below the previous low point of 876 reached on June 12th 2009.
- The oil price rally has stalled with the formation of an interim top in progress. There is as yet little sign of a significant drop in US production.
- The current action appears to be demand driven, the low price raising demand more than it is suppressing supplies.
Figure 1 Daily Brent and WTI prices from the EIA, updated to 26 May 2015. The price rally has stalled for the time being with an interim top forming. This action is set alongside growing production and demand.
Figure 2 Oil price bigger picture. The plunge has not be so severe as in 2008/09 reflecting different causes behind the two price crash events. The 2008/09 crash was associated with the finance crash, unwinding of speculative positions and ensuing recession. The oil price recovery then was led by OPEC slashing production. The 2014/15 crash was caused by over supply of LTO in the USA and the decision made by OPEC to not cut production to support price. While latent recessionary pressures may have contributed to the crash it seems clear now that low oil price is promoting demand and that increased demand has driven prices marginally higher. The anticipated steep fall in LTO production in the USA has yet to materialise.
Figure 3 Oil and gas rig count for the USA, data from Baker Hughes up to 29 May 2015. The recent top in operating oil rigs was 1609 rigs on 10 October 2014. On 29 May the figure was 646, down 963 or 60%. The rate of fall in oil rig count has slowed appreciably (Figure 4) and the gas rig count has stabilised at around 220 units. The total rig count now stands at 875, one unit below the low point reached on June 12th, 2009.
Figure 4 Detail of the US rig count statistics showing that the decline in oil rig count is slowing but is quite definitely still down. The gas rig count appears to have stabilised. US natural gas production has continued to rise as have imports. The data tend to suggest that the US can maintain gas production levels with as few as 220 rigs drilling mainly shale gas.
Figure 5 US oil production stood as 12.6 Mbpd in April 2015, down 20,000 bpd on the revised March figure. The growth in US oil production has now perhaps stalled but there is as yet no sign of decline. C+C+NGL = crude oil + condensate + natural gas liquids.
Figure 6 OPEC spare capacity re-plotted with Saudi Arabia on top letting us see what is going on with the other countries more easily. Close examination shows that apart from Saudi Arabia, Iran is the only other country with significant spare capacity of 720,000 bpd waiting to come on when sanctions are lifted. Spare capacity in the remaining countries is effectively zero. OPEC countries may cut production to raise prices but cannot raise production to suppress prices with the exception of Saudi.
Figure 7 OPEC production plus spare capacity in grey. The chart conveys what OPEC could produce if all countries pumped flat out. OPEC production stood at 31.21 Mbpd in April, up 160,000 bpd on March. Production is rising slowly but is effectively trending sideways. Libyan production recovered a little in April to 520,000 bpd but is still well below capacity of 1.7 mbpd reached in 2008.
Figure 8 Saudi production fell by 90,000 bpd to 10.1 Mbpd in April. Saudi production is effectively moving sideways since around 2012. NZ = neutral zone which is neutral territory that lies between Saudi Arabia and Kuwait and shared equally between them.
Figure 9 Middle East OPEC oil rig count from Baker Hughes. The oil rig count for these four countries was unchanged at 161 units in April.
Figure 10 The international oil rig count continues its slow decline down to 930 units in April from 976 in March. International drilling activity run out of Aberdeen has remained comparatively buoyant.
Figure 11 Russia and other FSU oil production remains rock steady. Russia is one of the world’s largest producers with 11.04 Mbpd in April 2014, up 20,000 bpd on March. Other FSU was down 30,000 bpd at 3.01 Mbpd.
Figure 12 The cycles in European production data are down to summer maintenance programs in the offshore North Sea province. To get an idea of trend it is necessary to compare production with the same month a year ago. Compared with April 2014, European production is up 20,000 bpd.
- Norway Apr 2014 = 1.93 Mbpd; Apr 2015 = 1.95 Mbpd; up 20,000 bpd YOY
- UK Apr 2014 = 0.93 Mbpd; Apr 2015 = 0.95 Mbpd; up 20,000 bpd YOY
- Other Apr 2014 = 0.57 Mbpd; Apr 2015 = 0.55 Mbpd; down 20,000 bpd YOY
The decline in North Sea production has been arrested and there is little sign that the oil price crash is impacting production in this sector.
Figure 13 This group of S and E Asian producers had been declining slowly since 2010. But the pattern of IEA revisions has produced a top of 8.0 mbpd in March creating a distinct picture of an undulating plateau. The group produced 7.86 Mbpd in April, down 140,000 bpd on the upwards revised March figure.
Figure 14 N American production paused in April, mainly on the back of production decline in Canada and Mexico.
- USA Mar 2015 12.62 Mbpd; Apr 2015 12.60 Mbpd; down 20,000 bpd
- Canada Mar 2015 4.47 Mbpd; Apr 2015 4.30 Mpd; down 170,000 bpd
- Mexico Mar 2015 2.71 Mbpd; Apr 2015 2.65 Mbpd; down 60,000 bpd
Group production down 250,000 bpd from March.
Figure 15 Total liquids = crude oil + condensate + natural gas liquids + refinery gains + biofuel. April production was 95.70 Mbpd up 460,000 bpd on March. The oil price will unlikely begin to stage a proper recovery until production drops below the trend line. It is currently heading in the wrong direction for those in need of higher price. But the data do suggest a global economy hungry for cheap oil.
Figure 16 To understand this chart you need to read my earlier posts [1, 2]. The data are a time series and the pattern describes production capacity, demand and price. This chart pattern is not behaving as I anticipated this far. It was expected that production should fall in response to low price. But instead it has risen and the chart is currently increasingly demand driven, low price stimulating demand for oil more than it is suppressing supply. Should this chart continue to rise to the right it would be very bullish for both the global economy and the oil industry, as larger volumes of oil are sold for higher prices.