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U.S. Proved Oil Reserves Remain Flat, Natural Gas Reserves Decline

Lower crude oil and natural gas prices reversed in 2019 a two-year trend of record high proved reserves in the United States as operators revised down their total proved reserves estimates, the Energy Information Administration (EIA) said on Friday.

The annual report from the EIA showed that proved reserves of crude oil and lease condensate remained basically the same in 2019 as in 2018, with a very slight increase of 0.1 percent. Proved reserves of natural gas, on the other hand, dropped by 1.9 percent, according to EIA’s data through the end of 2019.

In that year, crude oil prices were generally lower than oil prices in 2018, with the price of the U.S. benchmark, West Texas Intermediate (WTI) crude oil, averaging $57 per barrel, down by $7 a barrel compared to 2018.

“Lower crude oil prices in 2019 caused many operators to revise their total proved reserves estimates downward even though proved reserves from extensions and discoveries increased slightly,” the EIA said.

To compare, higher oil and natural gas prices in 2018 raised the proved reserves of oil and gas in the United States to new all-time highs. Oil and natural gas proved reserves beat the previous record from the previous year, when rising prices and continued shale resource development in 2017 helped push U.S. reserves to what was then record-high volumes. In 2018, U.S. proved reserves of crude oil jumped by 12 percent.

In 2019, U.S. proved reserves of oil, at 47.1 billion barrels, remain at the record level set in 2018, the EIA said in its report. Producers in Alaska added 259 million barrels of proved reserves of crude oil and lease condensate in 2019, the largest net increase in all states.

In natural gas reserves, proved reserves recorded in 2019 the first annual decrease in the United States since 2015, with Texas posting the biggest decline with drops in large shale gas areas like the Eagle Ford, Barnett, and Bossier. 

Yet, total U.S. gas reserves remain at their second-highest level ever, the EIA said.

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By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on January 23 2021 said:
    The direct connections between oil prices, recovery factors (R/F) and the growth or decline of oil reserves are well recognized.

    With breakeven prices for US shale oil ranging from $48 to $68 a barrel, a decline in oil prices below the breakeven range directly affects US proven oil reserves.

    Currently the global R/F factor ranges from 34%-35%. A rise of even 1% in R/F as a result of advanced oil recovery and production technology adds 50 bn barrels of oil to current global proven reserves of 1734 bn barrels without even exploring or drilling for oil.

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

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