"The data must be wrong,
" according to veteran oil analyst Phil Verleger, who wrote in a blistering note that the Energy Information Administration is probably overestimating U.S. oil production by 1.6 million barrels per day.
Verleger argues substantially lower U.S. production is the most likely explanation for why global stocks are not rising as fast as predicted and discounts for storing barrels are narrowing ("Notes at the margin" May 11).
Other reasons why the stock build is smaller and the forward price structure is firmer could be stronger demand and/or more oil stockpiling in developing countries.
But if Verleger is correct, U.S. production would be only 7.7 million barrels per day (bpd) compared with the 9.3 million bpd reported in the agency's most recent weekly and monthly statistics.
The global oil market would be nearly balanced, since most estimates put the global supply surplus at between 1.5 and 2.5 million bpd.
In practice, it is highly unlikely EIA is making an error as large as 1.6 million bpd in its statistics on domestic oil production, but Verleger has drawn attention to the well-known shortcomings in this area of the data.http://www.reuters.com/article/2015/05/12/eia-oil-data-kemp-idUSL5N0Y35FX20150512
The U.S. government on Tuesday lowered its 2015 and 2016 crude oil production growth forecasts amid lower prices and fewer active drilling rigs.
In its short term energy outlook, the U.S. Energy Information Administration lowered its 2015 crude oil production growth forecast to 530,000 barrels per day (bpd) from 550,000 bpd, while 2016 growth was seen at 20,000 bpd, down from 80,000 bpd previously.
Meanwhile, it raised its 2015 U.S. oil demand growth forecast to 340,000 bpd vs 330,000 bpd seen last month and cut its 2016 demand growth forecast to 70,000 bpd from 90,000 bpd previously.
Since last June, U.S. producers have reacted quickly to a nearly 60 percent drop in prices by cutting spending, eliminating jobs and idling more than a half of the country's rigs. Active oil rigs last week declined for the 22nd week in a row, Baker Hughes reported.
Still, "while there are fewer rigs drilling for crude, U.S. oil production this year is still on track to be the highest in more than four decades," EIA Administrator Adam Sieminski said in a statement.
The EIA added that U.S. crude oil production averaged some 9.3 million bpd in March, but is expected to decline from June through September before growth resumes.http://www.reuters.com/article/2015/05/12/eia-oil-outlook-idUSL1N0Y31LI20150512