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Government data indicates American output hit an all-time high last week, signaling the resilience of North American drilling as oil prices begin another recovery.
The U.S. produced 9.62 million barrels of oil per day through November 3rd, the Energy Information Administration (EIA) said today, overtaking the previous high that occurred back in June 2015.
The agency’s Petroleum Status Report from last week said exports hit an all-time high at two million bpd as well.
The combined effect of the reports sent West Texas Intermediate (WTI) downwards on Wednesday.
While EIA often revises its weekly production figures, American shale production continues to frustrate the Organization of Petroleum Exporting Countries (OPEC), which has focused on reducing the global supply glut in order to help Brent prices recover to former highs.
After Brent and WTI both fell yesterday as traders started taking profit on the latest price rally, the EIA reported that U.S. crude oil inventories went up in the week to November 3, by 2.2 million barrels, rejecting API estimates of a 1.562-million-barrel draw.
Analysts polled by S&P Platts had forecast a 2.7-million-barrel draw in crude inventories, as well as a 2.25-million-barrel decline in gasoline stockpiles. The EIA said gasoline stockpiles did indeed decline, by 3.3 million barrels, which should provide some support to bulls.
The current rally may prove to be a lasting one, unlike the recent price spike after a variety of comments from both OPEC and Russian energy officials. But this time, the game is different: it’s a Middle Eastern version of Game of Thrones, and even if things don’t come to a head, the hostile exchange of threats would be enough to support oil prices at least until November 30.
Both sides in the Saudi-Iran conflict would benefit from higher oil prices, but it would be more meaningful to the Kingdom as it plans to list its national oil company in H2 2018—whether it could keep threatening Iran until then is doubtful, so the possibility of an open conflict is a real one.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…