|Month||Month End BPD||+/- from Previous Month|
|Sept. 2015||9096||-122,000 BPD|
|Oct. 2015||9160||+64,000 BPD|
|Nov. 2015||9202||+42,000 BPD|
|Dec. 2015||9202||0 BPD|
|Jan. 2016||9221||+19,000 BPD|
|Feb. 2016||9102||-119,000 BPD|
|March 2016||9022||-80,000 BPD|
|Chart 1 compiles the Month End Barrels Per Day from the Weekly EIA Reports. The BPD are in thousands of barrels. Hence, 9096 is 9,096,000 barrels per day. The weekly reports are compiled by the EIA using a computer model. The data is not entirely accurate, but is "in the ballpark". That being said, the Monthly data (see below, Chart 2) is much, much more accurate. What stands out with the data from Sept. to Dec. is that the EIA reported production increases of 64,000 BPD in Oct., and 42,000 BPD in Nov. Compare that with the actual large production decline in October of 79,000 BPD on the Monthly report. I do not believe we will see a monthly decline in production reported on the weekly reports until the Daily Preduction number from the weekly report is nearly equal to or greater than the daily production number from the Monthly report. That should happen by February.
My thesis (see the previous two sentences), seems to proving correct. Now that the monthly and the weekly production data are only off by 60,000 bpd., we are seeing large production declines on the weekly reports. That being said, the monthly production data will probably be lower then the weekly production data for January, hence the reason production started to decline on the weekly reports in Feb. You gotta love the EIA! They completely over estimated production cuts in the summer of 2015, but it has only taken them 6 months to sort it out! Additionally, we have seen our first month over month decline in production on the weekly reports since Sept., which is fascinating, since we know from the monthly report that production was actually up 45,000 bpd. in Sept. (see chart below).
The last weekly report in March reported production at 9,022,000 bpd. We are getting very close to going below 9,000,000 bpd. since late 2014. We should dip below 9,000,000 sometime in the next week or two.
|Month||Month End BPD||+/- BPD from Previous Month|
|Sept. 2015||9452||+45,000 BPD|
|Oct. 2015||9377||-75,000 BPD|
|Nov. 2015||9328||-49,000 BPD|
|Dec. 2015||9235||-93,000 BPD|
|Jan. 2016||9179||-56,000 BPD|
|Chart 2 compiles the BPD from the EIA's Monthly Crude Oil production report. Production was down again, for the fourth month in a row.
See this chart to get an idea of just how much producers are planning on cutting in fiscal 2016 (http://bburmeister.com/page13.php). My guess is that we will see production really plummet in 2016. It seems most producers plan on cutting around 10%-20%.
|Month||BPD (as reported on the weekly report)||BPD (as reported on the monthly report)||Diff.||Which is higher? Monthly or Weekly|
|Sept. 2015||9096||9452||353,000 BPD||Monthly|
|Oct. 2015||9160||9377||210,000 BPD||Monthly|
|Nov. 2015||9202||9328||126,000 BPD||Monthly|
|Dec. 2015||9202||9235||33,000 BPD||Monthly|
|Jan. 2016||9221||9179||42,000 BPD||Weekly|
|Chart 3 shows the difference between the Daily Production Numbers of the EIA's Weekly Reports, and the EIA's Monthly report. The EIA monthly production number is now "only" 60,000 bpd greater then the last weekly report for the month of December. This is certainly an improvement from the difference of 353,000 for the month of Sept. With the January production now reported at 9179, and with the EIA reporting 9221 on the weekly report at the end of January, the Monthly production data is now below the weekly production data for the first time in months.|
|Month||Predicted Production +/-||Actual Reported Monthly Production BPD +/-|
|Sept. 2015||-93,000 BPD||+45,000|
|Oct. 2015||-80,000 BPD||-75,000|
|Nov. 2015||-93,000 BPD||-49,000|
|Dec. 2015||-118,000 BPD||-93,000|
|Jan. 2016||-116,000 BPD||-56,000|
|Feb. 2016||-116,000 BPD|
|March 2016||-92,000 BPD|
|April 2016||-106,000 BPD|
|May 2016||-114,000 BPD|
|Chart 4 is a comparison between what the EIA is reporting on their Drilling Productivity Report (http://www.eia.gov/petroleum/drilling/#tabs-summary-2) and their Monthly Production Report (http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_m.htm). This should help give an idea of how accurate their estimates of future production are. Clearly the EIA was way off in their Sept. estimate, as they were predicting a decline of nearly 93,000 BPD, when in fact the EIA reported an increase for September of 45,000 bpd. The EIA reported that prodution was down 49,000 bpd. in November. The EIA had been predicting that production would drop by 93,000 bpd. The EIA was also off in their December estimate, as they were estimating production would decline by around 118,000 bpd, when in fact production declined by 93,000 bpd. Never the less, that is three months in a row that production has fallen. The EIA was predicting a decline of 116,000 bpd. in January, when in fact production fell by only 56,000 bpd. We shall see if the January number is revised downward in the coming months.|