• 4 minutes The Federal Reserve and Money...Aspects which are not widely known
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 5 days Coincidence of EIA Report Delay? - "I had seen it delayed minutes, and a couple of times a few hours, but don’t recall something like this — do others?" asks Javier Blas
  • 3 days European Parliament Members, Cristian Terhes et al, push back against Totalitarian Digital ID and Carbon Tyranny in Europe.
  • 4 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 2 days "How Long Will The Epic Rally In Energy Stocks Last?" by Tsvetana Paraskova at OILPRICE.COM
  • 5 days "...too many politicians believe things that aren’t true." says Robert Rapier
  • 6 days Demonising fossil fuels has caused major grid problem in Australia
  • 5 days Welcome to Technocracy - The New World Energy Order... "1000s Of Sydney Homes Plunged Into Darkness As Aussie 'Price Cap' Policy Sparks Energy Shortage"
  • 7 days "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 332 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)

U.S. Oil Boom Suppressed Oil Prices In 2019

Rising U.S. crude oil production weighed on oil prices throughout 2019, and combined with the weak demand growth last year, booming American oil output resulted in lower average oil prices in 2019 compared to 2018, the U.S. Energy Information Administration (EIA) said on Tuesday.

Brent Crude prices averaged US$64 a barrel last year, which was US$7 per barrel lower than the international benchmark’s 2018 average price. The price of WTI Crude averaged US$57 per barrel in 2019, also US$7 a barrel lower than in 2018, EIA’s data showed.  

Oil prices traded in a narrow range last year, as continuously growing U.S. production and weakening demand growth offset bullish factors such as OPEC’s ongoing production cuts and geopolitical flare-ups in the Middle East. The Brent price range last year was just US$20 a barrel—the narrowest range in which the benchmark has traded since 2003, according to the EIA. WTI Crude prices ranged between US$47 and US$66 per barrel.

Despite the narrowest trading range in more than half a decade, last year saw the largest single-day price spike since 2008—this happened on the first trading day following the attacks on Saudi Arabia’s oil facilities in the middle of September which cut off some 5 percent of the daily global supply for weeks.

The price hike was short-lived amid assurances from the Saudis that they would quickly restore supply and amid the prospects of very weak demand growth as the U.S.-China trade war raging.

Booming U.S. production also likely limited the impact of the attacks on oil prices, the EIA said. America’s crude oil production also likely offset the efforts of OPEC and its Russia-led allies to curtail supply to support prices, as well as the U.S. sanctions on Iran and Venezuela’s crude oil exports.   

The EIA expects U.S. crude oil production to have averaged 12.3 million bpd in 2019, easily making the U.S. the world’s top crude oil producer.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on January 07 2020 said:
    One and only one factor suppressed oil prices in 2019. That factor was the trade war which augmented an already existing glut to an estimated 4.0-5.0 million barrels a day (mbd) during two years of the war. The glut was big enough to undermine OPEC+ production cuts, nullify the impact of geopolitics and outages on oil prices and even absorb the loss of half of Saudi oil production.

    The proof is that oil prices surged to $66-$67 a barrel in December the minute a de-escalation of the trade war was announced in December. This has had nothing to do with US shale oil production. In fact, 2019 was the year in which the hype around US shale oil production finally burst.

    And despite the hype by the US Energy Information Administration (EIA), US production is over-stated by at least 2 mbd. This means that US oil production averaged 10.3 mbd in 2019 and not 12.3 mbd as the EIA claimed and is projected to decline to below 10 mbd in 2020 and will continue declining until its demise in 4-9 years from now.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News