Oil Industry Segment Update and Production Trends Overview
Oil Industry Segment Update
Lee K. Johnson
Hess Corporation
Rail Energy Transportation Advisory Committee
Surface Transportation Board
November 16, 2021
Global Production and Consumption
WTI and Brent Price Reaction
2
Recent WTI Prices
October 4
$77.68
October 11
$80.64
October 18
$82.62
October 25
$84.64
November 1
$84.08
November 8
$82.21
Source: EIA
US Crude Oil Production
MBPD
3
Source: EIA
Note: Peak 12.97 November 2019 – down 12.8%
US Tight Crude Oil Production
MBPD
4
Sources: EIA
Note: Peak 8.30 March 2020 – down 10.7%
Williston Basin Crude Oil Production and Modal Share
MBPD
5
5
Sources: ND Pipeline Authority and EIA
Note: Peak 1.50 November 2019 – down 26.8%
US Land Rig Count - Oil
6
Source: Baker Hughes
Note: USA peak 2,019 December 2011 – down 78%
Texas peak 938 June 2012 – down 67.6%
North Dakota peak 203 June 2012 – down 89%
Total US and Canada CBR
KBPD
7
Source: EIA
Note: Peak 411.91 February 2020 – down 67%
Canada CBR to Destinations in US
KBPD
8
Source: EIA
Note: Peak 2,061.4 November 2014 – down 93%
Summary
•
Global crude oil consumption currently exceeding production
-eia
•
Global stock draw projected to end 4Q 2021
- eia
•
Global production/consumption equilibrium projected for 1Q 2022
- eia
•
Small global stock build projected through balance of 2022
- eia
•
WTI pricing is at a seven-year high
- eia
•
US crude oil production is down 12.8% from pre-pandemic levels
-eia
•
Land rig count is down 78% from historic peak
– Baker Hughes
•
Texas/New Mexico/Oklahoma CBR is sporadic and at low levels
- eia
•
Bakken crude oil production is down 26.8% from pre-pandemic levels
-eia
•
No CBR USA to Canada; Canada to USA is down 93.4% from peak
- eia
•
Lawsuit against DAPL was dismissed in June 2021
- AP
•
Court established a path for plaintiff to file another lawsuit challenging the new EIS planned for 2022
-AP
•
DAPL capacity has been expanded by 180,000 bbl/d to 750,000 bbl/d
- API
9
The oil industry segment is experiencing fluctuations in production and prices, as indicated by recent data on WTI and Brent prices, US crude oil production, tight crude oil production, Williston Basin crude oil production, US land rig count for oil, and total US and Canada CBR. The updates highlight changes in production levels, modal shares, and industry insights, portraying a dynamic landscape in the oil sector.
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Presentation Transcript
Oil Industry Segment Update Lee K. Johnson Hess Corporation Rail Energy Transportation Advisory Committee Surface Transportation Board November 16, 2021
Global Production and Consumption WTI and Brent Price Reaction Recent WTI Prices October 4 October 11 October 18 October 25 November 1 $84.08 November 8 $82.21 $77.68 $80.64 $82.62 $84.64 Source: EIA 2
US Crude Oil Production MBPD 12.00 11.31 10.58 10.00 9.07 8.41 8.00 6.00 4.00 1.86 1.73 2.00 0.44 0.37 0.00 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Total Lower 48 Fed Off S Alaska Note: Peak 12.97 November 2019 down 12.8% Source: EIA 3
US Tight Crude Oil Production MBPD 8.00 7.41 7.07 7.00 6.00 5.59 5.14 5.00 4.00 3.00 2.00 1.21 1.10 1.00 0.41 0.41 0.31 Oct-20 0.31 Sep-21 0.00 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Total TX-NM-OK ND CO Other Note: Peak 8.30 March 2020 down 10.7% Sources: EIA 4
Williston Basin Crude Oil Production and Modal Share MBPD 1.40 1.21 1.20 1.10 1.00 0.92 0.87 0.80 0.60 0.40 0.18 0.20 0.14 0.07 0.06 0.05 0.02 Sep-21 0.00 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Production Pipeline Railroad Refinery Canada Note: Peak 1.50 November 2019 down 26.8% Sources: ND Pipeline Authority and EIA 5 5
US Land Rig Count - Oil 500 450 445 400 350 304 300 250 236 200 172 150 119 100 53 50 22 11 0 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Total TX Other ND Note: USA peak 2,019 December 2011 down 78% Texas peak 938 June 2012 down 67.6% North Dakota peak 203 June 2012 down 89% Source: Baker Hughes 6
Total US and Canada CBR KBPD 300 258.77 250 200 150 136.10 115.13 98.39 100 50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 US CBR Canada US CBR Note: Peak 411.91 February 2020 down 67% Source: EIA 7
Canada CBR to Destinations in US KBPD 400.00 341.84 350.00 300.00 250.00 200.00 136.07 150.00 115.13 100.00 62.73 46.97 50.00 46.84 40.40 20.26 12.00 22.00 0.00 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Total East Coast Midwest Gulf Coast West Coast Note: Peak 2,061.4 November 2014 down 93% Source: EIA 8
Summary Global crude oil consumption currently exceeding production -eia Global stock draw projected to end 4Q 2021 - eia Global production/consumption equilibrium projected for 1Q 2022 - eia Small global stock build projected through balance of 2022 - eia WTI pricing is at a seven-year high - eia US crude oil production is down 12.8% from pre-pandemic levels -eia Land rig count is down 78% from historic peak Baker Hughes Texas/New Mexico/Oklahoma CBR is sporadic and at low levels - eia Bakken crude oil production is down 26.8% from pre-pandemic levels -eia No CBR USA to Canada; Canada to USA is down 93.4% from peak - eia Lawsuit against DAPL was dismissed in June 2021- AP Court established a path for plaintiff to file another lawsuit challenging the new EIS planned for 2022 -AP DAPL capacity has been expanded by 180,000 bbl/d to 750,000 bbl/d - API 9
