US crude production hits all time high

The US is now close to moving ahead of Russia as the largest producer in the world.

By Edward Bell

US oil production hit 11m b/d for the first time ever last week. Production growth continues to accelerate, up 1.57m b/d compared with the same time last year. Data generally across the report was relatively bearish despite a drop in gasoline inventories. Refinery utilization decreased while overall crude stocks rose. Exports dipped and that may have helped contribute to an increase in inventories.

Permian pricing remains weak

Source: EIKON, Emirates NBD Research. Note: USD/b against WTI.

Pricing in the key growth centre—the Permian basin—has resumed its downward path and was holding on to levels around USD 56/b. This barely leaves enough headroom for producers in the region to develop new wells as breakeven costs estimate by the Dallas Fed are roughly USD 53/b. The EIA projects that Permian basin production will hit over 3.4m b/d in August, growth of 73k b/d m/m.