US oil production moves past 9.7m bpd

US crude oil production continues to push higher, up over 9.7m b/d last week. Oil producers in the US will be taking solace from OPEC’s decision to maintain a floor under oil prices by extending their current production cut deal for all of 2018 and even among the lower growth forecasts for US crude growth, the country will easily push past 10m b/d next year.

Total stocks hold around 800m bbl

Source: EIA, Emirates NBD Research 

Crude stocks declined last week by 5.6m bbl, likely as a result of supply disruptions to an export pipeline from Canada that suspended operations due to a spill earlier in the month. However, product inventories, and gasoline in particular, jumped higher. Total crude and product inventories have been holding steady in recent weeks at around 800m bbl, not far off their five-year average of around 780m bbl. However, at the end of 2012 the five-year average of total products was closer to 700m bbl. The arithmetic narrowing of inventories to ‘normal’ levels may lull the market into thinking it’s tighter than it actually is.

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