• 3 days Nuclear Bomb = Nuclear War: Saudi Arabia Will Develop Nuclear Bomb If Iran Does
  • 2 days Statoil Changes Name
  • 3 days Tillerson just sacked ... how will market react?
  • 2 days Russian hackers targeted American energy grid
  • 1 day Is $71 As Good As It Gets For Oil Bulls This Year?
  • 3 days Petrobras Narrows 2017 Loss, Net Debt Falls Below $85bn
  • 3 days Proton battery-alternative for lithium?
  • 2 days Ford Recalls 1.38 Million Vehicles (North America) For Loose Steering Wheel Bolt
  • 1 day Oil Boom Will Help Ghana To Be One Of The Fastest Growing¨Economies By 2018!
  • 2 days Country With Biggest Oil Reserves Biggest Threat to World Economy
  • 2 days I vote for Exxon
  • 3 days UK vs. Russia - Britain Expels 23 Russian Diplomats Over Chemical Attack On Ex-Spy.
  • 3 days Why is gold soooo boring?
  • 3 days South Korea Would Suspend Five Coal - Fire Power Plants.
  • 1 day Spotify to file $1 billion IPO
Alt Text

Saudis Hint They Could Delay Aramco IPO Until 2019

The initial public offering of…

Alt Text

Oil Prices Bounce After A Tough Week

Oil prices fell in the…

Alt Text

Is Another Oil Price War Looming?

Conventional wisdom says U.S. oil…

Oil & Gas 360

Oil & Gas 360

From our headquarters in Denver, Colorado, Oil & Gas 360® writes in-depth daily coverage of the North American and global oil and gas industry for…

More Info

Trending Discussions

Hydrocarbon King: U.S. Ranks No.1 In 2016

Oil Rig

Decreasing production in 2016 not enough to dethrone U.S. oil and gas industry

Despite the lowest commodity prices in 13 years, U.S. oil and gas production in 2016 continued to outpace all other nations, according to a note from the EIA.

The United States has been first in the world in natural gas production since 2009, when American output surpassed Russia. U.S. production of “petroleum hydrocarbons” (a catch-all term the EIA uses to account for crude oil, condensate, bitumen, natural gas plant liquids, biofuels and others) exceeded that of Saudi Arabia in 2013.

(Click to enlarge)

Source: EIA

Low prices decreased oil, gas production

WTI prices in 2016 dropped to a bottom of $26.05/bbl in intraday trading in February, the lowest price seen since mid-2003. These low prices in the beginning of the year understandably depressed oil activity last year, and U.S. petroleum production fell by about 300 MBOPD.

In the U.S., crude oil and condensate only accounts for about 60 percent of total petroleum hydrocarbons production. Saudi Arabia and Russia produce significantly fewer NGPLs and biofuels and have smaller refinery gains, meaning that in these countries this percentage is much higher. Related: OPEC Production Spikes – Has The Cheating Begun?

U.S. natural gas production in 2016 faced similar challenges to oil production. According to the EIA, strong growth in gas production in 2015 and a mild winter meant average gas prices in 2016 were the lowest seen since 1999. These low prices caused natural gas production to drop by 2.3 Bcf/d in 2016.

Russia, Saudi production grew in 2016

The U.S. remains the largest hydrocarbon producer in the world, even with low prices. America’s dominance is even more impressive because both Saudi Arabia and Russia saw production increase in 2016.

According to the EIA, Russian oil and gas companies have been increasing CAPEX recently, which has pushed up production. Russian tax regimes are highly favorable, and exchange rates also encourage further activity. Russian oil production broke records in late 2016, before the production cut took effect. Natural gas production also rose, as European OECD countries saw gas demand increase by 6 percent in 2016. Related: Oil Prices Collapse As The EIA Reports Unexpected Inventory Build

Saudi Arabia also saw production increase in 2016, before the country agreed to production cuts late in the year. The EIA estimates that total Saudi hydrocarbon production rose by 3 percent last year.

U.S. dominance to continue thanks to shale ramp-up

The U.S. is likely to remain the foremost hydrocarbon producer in the future as well, as shale companies continue to ramp up activity. The EIA estimates that U.S. petroleum hydrocarbons production will grow by about 0.8 MMBOPD in 2017 and 1.1 MMBOPD in 2018. This growth is significantly higher than expected growth from Russia or Saudi Arabia, particularly because both countries agreed to extend production cuts through March 2018.

U.S. natural gas production is predicted to grow by about 1 Bcf/d in 2017 and 3.3 Bcf/d in 2018.

By Oil & Gas 360

More Top Reads From Oilprice.com:

Back to homepage

Trending Discussions

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News