EIA Projects An Increase In Global Oil Supply

The EIA’s Short Term Energy Outlook is out. The data is in million barrels per day.

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While not much has changed in the EIA’s projection since last month, their projection for the remainder of this year and next year has increased slightly.

The EIA has Non-OPEC total liquids peaking, so far, in 2015. They have Non-OPEC liquids dropping .58 Mbd in 2016 and another .24 Mbd in 2017.

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The EIA has U.S. C+C production dropping sharply through August then leveling out for the remainder of the next two years.

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All gain in the next year and a half will come from the Gulf of Mexico, or that is what the EIA expects. The spikes lower in August, September and October are the EIA making their expectations of what the hurricane season will bring.

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The EIA expects Alaska to continue to decline, though slowly.

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The EIA sees U.S. lower 48 bottoming out around January but no recovery next year.

Canada has released its latest oil production data and outlook: Estimated Production of Canadian Crude Oil and Equivalent. This is “oil and equivalent”. I really don’t know what they mean by “equivalent” but this is 130 thousand barrels per day less than what the EIA has them producing in total liquids. The data is in thousand barrels per day.

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The big drop in May was caused by the massive wildfires in and around Fort McMurray. They expect to be about half recovered in June. But what they have projected for the fourth quarter of 2016 was, to me anyway, a real shocker. They expect to be producing at previous historical highs.

How Bad Is Canada’s Oil Bust? Try the Worst Spending Drop in 70 Years

Overall, oil and gas producers in Canada have cut a whopping $50 billion in capital investments over the past two years. That’s the biggest two-year decline since at least 1947, which is when the Canadian Association of Petroleum Producers started tracking investment spending.

In percentage terms, producers have now cut spending by 62 percent since it peaked at $81 billion in 2014, with spending in the oil sands being cut in half to just $17 billion. That’s the lowest investment rate for the region since just after the financial crisis.

However, spending in the oil sands region would likely be even lower if it wasn’t for the long lead time of these projects; the bulk of 2016’s investment dollars are being spent on projects that started construction prior to the downturn.

Well hell, if you can cut capex by 62 percent and continue to produce at record highs, then I say go for it.

The Baker Hughes International Rig Count is out with monthly rig count numbers for May, 2016. This count does not include any FSU countries or inland China. Related: Oil Holds Steady As EIA Confirms 3.2M Barrel Draw

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In November 2014 the count stood at 3,570 rigs. Last month the count was 1,405, a drop of 2,165 rigs or 61 percent.

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Canada rigs stood at 42 in May, up 1 from April. This is both oil and gas rigs. Canada oil rigs, last week, stood at 13.

If my prediction of 2015 as the year crude oil peaked is to be proven wrong, it looks like those making that claim will have to wait a few years to make their case. I know, there is nothing about OPEC in this report but OPEC is looking pretty shaky right now. Related: Iranian Oil Exports Soar As Shipping Companies Return To Iran

EDIT: I just had to add this. I don’t know how I overlooked it. It is from the same Short Term Energy Outlook linked above. It was constructed from data found in table 3a.

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Are you kidding me?

By Ron Patterson via Peakoilbarrel.com

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