US oil output dipped in December, but still beat earlier expectations

RT: oil drilling Permian Basin Texas 160602

U.S. oil production dipped in the final month of 2018, but December output still exceeded earlier projections, according to the Department of Energy.American drillers pumped 11.849 million barrels per day in December, according to the U.S. Energy Information Administration, the department’s statistics bureau. That marked a slight drop from 11.905 million bpd in November.

However, for the fifth month in a row, EIA’s report on monthly oil production showed that the bureau’s weekly reports underestimated the amount of oil being plumbed from U.S. fields. EIA’s earlier weekly readings, issued two to three months ago, had shown December output at 11.6 million to 11.7 million bpd.

EIA’s weekly data had been overestimating monthly production. In July, the bureau’s weekly reports roughly matched its final monthly reading of 10.9 million bpd. Since August, when U.S. production first topped 11 million bpd, those weekly readings have fallen short of later monthly reports.That does not mean EIA will continue to report better-than-expected monthly production figures. To be sure, the dip in December tracks with expectations for a temporary moderation in U.S. production growth.

Drillers in the Permian Basin, the epicenter of the U.S. shale oil boom, are grappling with a shortage of pipelines, making it hard to move crude from production fields to refineries and export terminals. Analysts expect the region underlying Texas and New Mexico to work through the bottlenecks in the coming months.The December production drop also comes after a big jump in output the previous month. Between October and November, U.S. output surged by nearly 350,000 bpd.This week, the EIA’s weekly report suggested U.S. crude oil production hit an all-time high at 12.1 million bpd.

Sources and photo-credits: Reuters, CNBC