Joint post with Neil Mearns who made and updated all the graphs (CV for Neil).
The oil price recovery to $56 (Brent) through the first half of April was short lived and it has since returned to $50. According to OilPrice.com, Russia is now compliant with its 300,000 bpd production cut. OPEC production is now down 1.43 Mbpd compared with October 16 (including Libya and Nigeria) and the group is over-compliant with the agreed cuts and must be disappointed in the continuing weak oil price.
IEA data shows Russia produced 11.6 Mbpd in October 2016 and 11.42 Mbpd in March 2017, a cut of 180,000 bpd. We must therefore assume that Russia has cut deeply during April. At end March, FSU production was up 30,000 bpd on October. If OPEC does not renew or expand production cuts in the second half of 2017 then the oil price is widely expected to collapse.
OPEC drilling remains close to a cyclical high while US drilling continues to recover. Total US rigs were up 46 to 870 for the month to the end of April. Drilling remains stuck on a cyclical low everywhere else. According to PennEnergy Global oil discoveries and new projects fell to historic lows in 2016 and this will be storing trouble in the years ahead when a lack of investment eventually works through the system emerging as reduced production creating a new cycle of scarcity and a new price spike.
The following totals compare March 2016 with March 2017:
- World Total Liquids 96.11/95.96 -150,000 bpd
- OPEC 12: 31.70/31.49 -210,000 bpd
- Russia + FSU 14.19/14.36 +170,000 bpd
- Europe OECD 3.59/3.58 -10,000
- Asia 7.59/7.39 -200,000
- North America 19.86/19.62 -240,000 bpd
The net YOY change for OPEC, Russia, Europe, Asia and N America is -480,000 bpd while world total liquids is only down -150,000 bpd. This is explained by a 420,000 bpd YOY rise in Brazilian production (Figure 21).
The following totals compare October 2016 with March 2017 and monitor compliance with the OPEC + others production cuts.
- OPEC 12: 32.92/31.49/ – 1,430,000 bpd
- Russia + FSU 14.51/14.36/ -150,000 bpd
- Oman 1.02/0.97/ -50,000 bpd
- Total -1.63 Mbpd
Note that Vital Statistics is now produced using the Global Energy Graphed database employing Google Sheets. Since these graphs are live, they will update automatically in future as more data are added meaning that the narrative of this post will no longer match the data in the months ahead.
Oil price data updated to 21 April 2017 using data from the EIA.
Figure 1 Daily oil prices from the EIA updated to 21st April. The recovery through the first half of April has been reversed and the oil price remains range bound. A significant drop below $50 (Brent) would be bearish.
Figure 2 Longer term view of daily oil price. Note how the Brent-WTI spread was a feature of the high oil price era.
Figure 3 WTI minus Brent. At its peak, the spread reached $30 per barrel. It has now virtually disappeared.
Rig count charts for North America, the USA, South America, The North Sea and OPEC are shown below. Additional charts for Europe, The Middle East, Africa and Asia-Oceania can be found here.
Rig counts provided by Baker Hughes are updated to 28th April for N America and to March 2017 for all the rest.
Figure 4 Stacked area chart showing North America total rig count. Peak drilling was reached on 27 January 2012 with a total of 2789 active rigs. The post oil price crash low was reached on 27 May 2016 when only 469 rigs remained active. Canada drilling is down, off the seasonal high. Mexico remains in the doldrums with less than 20 operational rigs. Only the USA, and mainly the shale sector, has come back to life.
Figure 5 Stacked area chart of US Total rig count showing the oil – gas split updated to 28th April. The total US rig count stands at 870, up 46 for the month.
Figure 6 Same data as above but plotted as unstacked line chart.
Figure 7 US rig count broken out by sedimentary basin / petroleum systems play. The recent revival in US drilling has been led by the Permian which is a prolific and low cost LTO play.
Figure 8 Drilling has slumped in the North Sea to a record low since 1995. 27 rigs were active in March compared with a pre-crash high of 58 rigs in April 2014. The Netherlands and Denmark both registered zero.
Figure 9 Drilling within OPEC remains close to a cyclical high. Note that the data series for Iraq and Iran are incomplete and affected by war and sanctions and are not shown.
Figure 10 The near-term top in S American rigs was 329 in August 2014. By June 2016 this had crashed to 158 and it remained at about that level for the remainder of the year. Drilling in S America, including OPEC members Venezuela and Ecuador, remains in the doldrums.
Monthly oil production data are compiled from the IEA OMR. The public data are normally released towards the end of the month and relate to the previous month meaning that we are always running 4 to 5 weeks behind real time. The oil production graphs are updated to March 2017.
The 15 graphs below are mainly composite production groups. Graphs for individual countries reproducing the whole of the IEA OMR oil production data can be found as follows:
Figure 11 The OECD has only 4 significant oil producers: the USA, Canada, Mexico and Norway. The UK has now become a small player with production ~ 1 Mbpd alongside small producers Denmark and Australia. Since the 2014 oil price crash, OECD production has effectively been stable at just below 24 Mbpd.
Figure 12 The shape of the N American stack is dominated by the USA where LTO production began to accelerate early in 2012. The near term peak for N America was in April 2015 at 20.12 Mbpd. In March 2017, total production was 19.62 Mbpd.
Figure 13 European oil production is dominated by the North Sea and in particular by Norway. The “other” category is dominated by Denmark with a contribution from Italy. The high on this chart is 7.1 Mbpd in April 2002, the low is 2.94 Mbpd in September 2013. The North Sea continues with its tentative recovery based on momentum built during the pre-2104 high oil price era.
Figure 14 Stacked chart for monthly oil production of 12 OPEC countries. Gabon, that rejoined OPEC in July 2016 is not shown. The grey band at top shows spare capacity. The IEA has not reported spare capacity since December 2016, focussing instead on quota compliance. The reference month for OPEC quotas was October 2016 when production hit a record high of 32.92 Mbpd. This had fallen back to 31.49 Mbpd in March, a reduction of 1.43 Mbpd including involuntary cuts from Nigeria and Libya.
Figure 15 Details of OPEC spare capacity. At the end of 2016, spare capacity was approaching historic lows of 1.99 Mbpd with most countries pumping flat out. The IEA has not published spare capacity data since December 16.
Figure 16 Iran pumped 3.80 Mbpd in March and is likely producing at close to capacity.
Figure 17 The promised revival of Libyan production to 1 Mbpd has stalled.
Figure 18 Rest of World production has been glued to a plateau of 30 Mbpd since January 2010. However this statistic hides winners and losers. Russia is the most prominent winner and China the most prominent loser.
Figure 19 Production in Russia and FSU ticked up in October to 14.51 Mbpd, the reference month for the OPEC + Russia deal. In March, production stood at 14.36 Mbpd, down 150,000 bpd and well short of the 300,000+ bpd promised constraint.
Figure 20 Production in SE Asia remains in slow decline, led by China.
Figure 21 South America, excluding OPEC countries Venezuela and Ecuador, is dominated by Brazil. Production for the group is stable. I do not know the reason for the steep fall in Brazil’s production that took place in June 2010.
Figure 22 The Middle East excluding OPEC is dominated by Oman. Other Middle East will be dominated by Bahrain. The group decline reflects wars in Syria and Yemen. Oman is party to the OPEC deal and production there is down 50,000 bpd since the October 2016 high.
Figure 23 Africa excluding OPEC (Libya, Algeria, Nigeria and Angola) has only one other major producer in the shape of Egypt. There are a host of smaller producers in the other category that includes countries like Equatorial Guinea, Republic of Congo, Gabon, South Sudan, Chad and Tunisia.
Figure 24 Summary of global C+C+NGL production. Note that OPEC countries’ NGL production is reported separately.
Figure 25 Global total liquids showing the constituent parts. Chart not zero scaled.