Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.



Oil Production Unexpectedly Declines

By Robert Rapier on June 29, 2017

Throughout all the discussions about the significant influence of crude oil inventories on oil prices, one variable that seems to be a given is that U.S. oil production will continue to soar. In trying to project future crude oil inventories, we have to consider global oil demand (which has been steadily rising), OPEC’s production cuts, and then the gains in U.S. oil production.

There are many possible ways our expectations could turn out to be wrong. Some believe demand for oil will peak shortly. (I do not). Some feel like OPEC won’t maintain the production cuts. Either of these scenarios would be bearish for oil prices. 

But what is given little consideration is the possibility that the U.S. oil production increases that have occurred in recent months may not be sustainable. If U.S. production slowed down, it would be a seriously bullish price signal for oil. So this topic warrants further investigation.

Here is what weekly crude oil production in the U.S. has looked like for the past ten years:

Note that from about mid-2012 to mid-2015, crude oil production increased at a relatively steady pace. For a little over three years, oil production increased each year by an average of 1.2 million barrels per day (BPD). The ensuing production gains were a major factor in crashing the global price of oil.

Fast-forward to October 2016, and oil production once again began to rise after it had fallen for more than a year. Since then, oil production has increased at an annualized rate of about 1.3 million BPD. From last October’s lows, more than 800,000 BPD had been added per last week’s Weekly Petroleum Status Report, published by the Energy Information Administration (EIA).

At that rate of increase, indeed the OPEC cuts could be entirely offset by surging U.S. shale production by early 2018. Concern that this may happen has been a major bearish factor weighing on oil prices. But two recent data points indicate that this may not be a safe assumption.

Last month the EIA raised some eyebrows when it projected that productivity from new wells in the Permian Basin was set to decline for the first time since they first tracked that metric in 2013.

Then this week the EIA reported a nationwide crude oil production decline of 100,000 BPD from the previous week. This was the first substantial decline since production began to rise last October. The decline was a surprise, and likely the reason oil prices remained firm even though this week’s inventory report was more bearish than expected. 

Of course, this could turn out to be an anomaly. There were some substantial declines on the way up the production slope from 2012 to 2015. However, the price of West Texas Intermediate (WTI) averaged $95/bbl during those years. Right now the price is under $45/bbl. There have certainly been cost reductions in the oil patch over the past five years, but it’s hard to imagine that drilling will continue to be as prolific as it was when oil was $50/bbl higher. 

Ultimately, though, it’s still going to come down to inventory levels. But if U.S. shale oil production stumbles, that situation will resolve itself sooner than expected. 

Follow Robert Rapier on Twitter, LinkedIn, or Facebook.

You might also enjoy…


Boost Your Annual Income By As Much As $12,036

We’ve uncovered a unique income-boosting opportunity that allows you to collect up to $1,003 a month in extra government cash. 

This plan is available to everyone over the age of 18.

The amount you make isn’t dependent upon your marital status…

How much money you currently make…

Or even how much money you made in the past.

Best of all, because of the way Uncle Sam views the money that comes from this plan, your current—or future—Social Security benefits won’t be affected, either. 

There’s still time to get your name on the list for the next check run. 

I’ll show you how here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.