Oil Production Vital Statistics: March 2015

This is the third in a monthly series of posts chronicling the action in the global oil market in 13 key charts. The February 2015 post is hereEIA oil price and Baker Hughes rig count charts are updated to end February 2015, the remaining oil production charts are updated to January 2015 using the IEA OMR data. The main oil production changes from December to January are:

  • World total liquids down 40,000 bpd
  • OPEC down 240,000 bpd
  • N America down 10,000 bpd
  • Russia and FSU down 70,000 bpd
  • UK and Norway down 40,000 bpd (compared with January 2014)
  • Asia up 60,000 bpd
  1. Global oil production has now been flat, just over 94 Mbpd since September 2014 (5 months).
  2. The fall in the oil price reversed in February. The low point for Brent and WTI was reached on 13th January when Brent hit $45.13. The bounce came on news of plunging US drilling rig count but has been much more muted for WTI compared with Brent. The US glut of LTO appears to continue.
  3. The main dynamic statistic has been the plunge in US oil rig count down 237 rigs for the month of February. Gas rig count is also heading down at the more sedate rate of 39 rigs for the month.
  4. I anticipate that the price bottom may be in but that price will bounce sideways along bottom for several months until we see significant falls in OECD production. Whilst there are clear signs that production growth has halted there is as yet little sign of production falling.
  5. Iraq and Libya combined were down 370,000 bpd in January. This may account for part of the bounce in price.

Figure 1 Daily Brent and WTI prices from the EIA, updated to 23 February 2015. Brent reached a low of $45.13 on 13th January and has since staged a modest recovery. It remains to be seen if the bottom is in. It is difficult to see the detail of recent action at this scale, so an expanded Y-axis chart is given below the fold.

Figure 2 On 13th January both WTI and Brent reached lows and the WTI-Brent spread closed completely and was temporarily reversed. Since then Brent has staged a much stronger recovery than WTI, the former rising $14.7 (32.6%) to 23rd Feb, the latter rising a meagre $3.64 (7.9%). While speculation is likely playing a role in the short term moves, the underlying situation of a glut of LTO in the USA persists as is borne out by the production figures detailed below.

Figure 3 Oil and gas rig count for the USA, data from Baker Hughes up to 27 February 2015. The recent top in operating oil rigs was 1609 rigs on 10 October 2014. On February 27th the count was down 623 to 986 units. The oil rig count is down 237 for the month of February.  The drilling slow down has yet to show up significantly in US oil production statistics (Figure 4). A backlog of wells already drilled are being fracked and hooked up. The gas rig count that was stable is now also heading down with a fall of 39 rigs for the month of February. It will be interesting to see when the US gas imports from Canada begin to rise.

Figure 4 US oil production stood as 12.32 Mbpd in January 2015. Production appears to have stopped rising and has been flat at 12.3 Mbpd for 4 months. C+C+NGL = crude oil + condensate + natural gas liquids.

Figure 5 The full OMR has not yet been published and I am unable to update this chart. But there is little change in OPEC production, hence there will be little change in spare capacity. The chart will be updated when the data are published.

Figure 6 OPEC production plus spare capacity (calculated) is in grey. The chart conveys what OPEC could produce if all countries pumped flat out. Production in January was down a meagre 240,000 bpd, all of that in Iraq and Libya who combined were down 370,000 bpd since December. There is absolutely no sign of the healthy OPEC nations cutting production although Algeria is showing signs of struggling to maintain production levels.

Figure 7 Saudi production is rock steady and stood at 9.69 Mbpd in January, up 70,000 bpd from December. NZ = neutral zone which is neutral territory that lies between Saudi Arabia and Kuwait and shared equally between them.

Figure 8 Russia remains one of the World’s largest producers with 10.95 Mbpd in December 2014, down 40,000 bpd on November. Other FSU also ticked down 30,000 bpd in December.

Figure 9 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 January 2014, UK+Norway production is down 40,000 bpd.

  • Norway Jan 2014 = 1.90 Mbpd; Jan 2015 = 1.91 Mbpd; up 10,000 bpd YOY
  • UK Jan 2014 = 0.91 Mbpd; Jan 2015 = 0.86 Mbpd; down 50,000 bpd YOY
  • Other Jan 2014 = 0.57 Mbpd; Jan 2015 = 0.71 Mbpd; up 140,000 bpd YOY (I believe the Jan 15 figure is likely a mistake)

The steep declines appear to have been arrested and with several new major projects in the pipeline North Sea production was expected to rise in the years ahead. The current price rout is bound to have an adverse impact and activity in the North Sea is winding down rapidly as companies enact major redundancies in the workforce.

Figure 10 China is a significant though not huge oil producer and has been producing on a plateau since 2010. Production was 4.14 Mbpd in January up 50,000 bpd from December. This group of S and E Asian producers have been declining slowly since 2010. The group produced 7.60 Mbpd in January, up 60,000 bpd on December.

Figure 11 N American production is slowing down and is essentially flat from December to January. At some point the plummeting rig count will bite.

  • USA December 2014 12.35 Mbpd; January 2015 12.32 Mbpd; down 30,000 bpd
  • Canada December 2014 4.36 Mbpd; January 2015 4.34 Mpd; down 20,000 bpd
  • Mexico December 2014 2.62 Mbpd; January 2015 2.66 Mbpd; up 40,000 bpd

Group production down 10,000 bpd from December.

Figure 12 Total liquids = crude oil + condensate + natural gas liquids + refinery gains + biofuel. January production was 94.07 Mbpd down 40,000 bpd on December. Production has been effectively flat, just above 94 Mbpd for 5 months but remains above the long-term trend line, still symptomatic of over-supply. 

Figure 13 To understand this important 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. The January data confirm my earlier inkling that both over supply and weak demand underpin the price rout.


[1] Energy Matters The 2014 Oil Price Crash Explained
[2] Energy Matters Oil Price Scenarios for 2015 and 2016

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12 Responses to Oil Production Vital Statistics: March 2015

  1. Luís says:

    Hi Euan, two notes:

    . Graph 13 is only presenting market equilibrium (or quantity “produced”) neither demand nor supply are present.

    . A graph on stocks would be an important addition to this post. It can help signalling where price is headed.


    • Euan Mearns says:

      Luis, I agree with your second point and will see what can be done. Regarding graph 13, I’m waiting to see where it heads off and to then work out what it’s telling us 😉

  2. I wouldn’t use NGL production in these graphs. It tends to confuse the real trends in crude and condensate. I sure wish we could segregate streams to isolate the liquids below say 45 degrees API.

  3. Euan Mearns says:

    I wouldn’t use NGL production in these graphs

    Do you have an up to date source of data that doesn’t have NGLs included? The last EIA entry is October 2014. JODI is December 2014. Not ideal for feeling the beating pulse of the global oil industry.

    • Euan, I don’t track these data bases. Mostly read blogs, the OPEC monthly report. But I’m pretty sure you would agree the NGLs muddy the picture. I know that within the industry they are kept separate. These agencies are lumping biofuels and NGL with crude and condensate, either because they are lazy or because they do want things muddied up. Tell you what I’ll look to see if I can find a public access source and I’ll let you know.

    • I can’t find NGL separated from oil. I don’t want to sound paranoid but I suspect it’s being done to mask peak oil.

      • Euan Mearns says:

        Fernando, The EIA provide crude only data, but its so far out of date as to not be useful in following the break neck speed of the markets. I would wonder about why the EIA budget was cut.

  4. Fig 12 doesn’t show that the world outside the US and Canada is in peak oil mode since 2005 as shown in these graphs on my website:


  5. Akshansh says:

    World total liquids down 40,000 bpd…is this number correct ? Should it be 340,000 bpd ??

    Considering that it is sum of next 5 points in your article.

  6. Don Miller says:

    To appreciate the crude price impact trend one needs to appreciate the volume step change of low cost crude stored at Cushing and in Refiners charge tanks (in say US refinery charge days terms.) Roughly Cushing can hold about 500 days of all the US production, and not all shale oil production flows through Cushing. Cushing is said to be almost full of arbitraged cheap oil.

    IMHO, as those Cushing tanks rim full more production is going to have to be discount priced to find a willing buyer for that capacity. Oil storage running low… http://www.bloomberg.com/news/articles/2015-03-12/oil-storage-squeeze-may-lead-to-another-price-crash Speaker saw WTI btms. at $41 w/o Iran agreement, $5-10 lower with agreement.

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