US Production + Unaccounted for Oil YoY Comparison

Data from EIA Weekly Report

psw01 2016-3-16

Many continue to believe that US production is relatively untouched over 2015.  However, the true story is exposed when you include Unaccounted for Oil.  The above plot clearly indicates that US production is dramatically down over 2015 and continues to trend down.  The official US production number is 9.06MM bbl/day fro the week of March 11, 2016, but when Unaccounted for Oil is included the total has been well below 9MM bbl/day 6 of the last 7 weeks.

US production + unaccounted for oil is cumulatively down almost 50MM bbl for the beginning of 2016 compared to the same time period in 2015.  This is a 6.7% drop.  While the mainstream financial news and many analysts still promote a story that US production is barely touched.  Some stories have been saying US production is down only 1% compared to the same time in 2015.  The weekly production numbers seem to support that.  However, this analysis masks the true trend.  Even when you use the EIA weekly production estimate and plot 2015 over 2016 as in the figure below, it becomes quite obvious there is a major divergence in 2016 production over 2015.  It is not hard to project that the divergence will be very pronounced come summer, with gasoline demand projected to be surging at or near a record pace.  This should push prices up much more than expected especially with 70% of world production coming together on April 17 to create a plan for production controls to support prices.  Those believing US shale will snap back to soak up any slack conceded by these producers are wrong, given less than 390 oil rigs are working in the US and the number continues to fall weekly.

Data from EIA Weekly Report

psw01 2016-3-16