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World Oil Supply

OPEC Monthly Oil Market Report – August 2017

47

Graph 5 - 12: US weekly oil rig count vs.

Crude oil production

Graph 5 - 13: US weekly oil rig count vs.

Horizontal drilling change

Several E&Ps divisions of companies including ConocoPhillips, Hess Corp and Anadarko Petroleum Corp,

reduced their capital spending plans in reaction to crude price declines over the past four months, according

to Reuters. Those companies had mapped out ambitious spending programs for 2017 when they expected

oil prices to be higher than they are currently.

Table 5 - 6: US rotary rig count on 4 August 2017

Canada

Actual

Canadian liquids production

in April 2017 indicates a drop of 0.42 mb/d m-o-m following the wildfire

at the Mildred Lake Syncrude upgrader in late March, declining to 4.39 mb/d, but this was still higher by

0.17 mb/d y-o-y. In April, oil sands output declined by 320 tb/d to average 2.32 mb/d. Conventional crude oil

and NGLs also declined by 36 tb/d and 64 tb/d to average 1.2 mb/d and 0.88 mb/d, respectively. Synthetic

production decreased by 0.23 mb/d m-o-m. It is expected that output is likely to increase gradually to reach

4.85 mb/d in July. If this is the case, returning output at Mildred Lake will cause July’s production to be higher

by 0.21 mb/d over June and 0.34 mb/d y-o-y. It is expected that synthetic crude production will rise by

0.16 mb/d in May following the partial recovery in production at Mildred Lake. In-situ bitumen output will fall

by 60 tb/d m-o-m, mostly from Foster Creek, Christian Lake and Firebag. Mined production will decrease by

90 tb/d. Preliminary estimates are for an unplanned two to four week reduction in synthetic crude output, as

the total output in the Scotford upgrader was reduced by 50 tb/d due to a problem at the plant’s hydrocracker

and planned work at CNRL’s Horizon upgrader, starting in September. Canadian oil supply growth in 2017

was revised down by 39 tb/d, to average 0.17 mb/d y-o-y, and annual average liquids supply will reach

4.67 mb/d.

8.0

8.2

8.4

8.6

8.8

9.0

9.2

9.4

9.6

9.8

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jul 15

Sep 15

Nov 15

Jan 16

Mar 16

May 16

Jul 16

Sep 16

Nov 16

Jan 17

Mar 17

May 17

Jul 17

mb/d

Rigs

US weekly oil rig count (LHS)

Crude oil production (RHS)

Sources: Baker Hughes and US Energy Information

Administration.

60

65

70

75

80

85

90

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jul 15

Sep 15

Nov 15

Jan 16

Mar 16

May 16

Jul 16

Sep 16

Nov 16

Jan 17

Mar 17

May 17

Jul 17

%

Rig

US weekly oil rig count (LHS)

Horizontal drilling change (RHS)

Source: Baker Hughes.

4 Aug 17 Month ago Year ago M-o-m Y-o-y Y-o-y, %

Oil and gas split

Oil

765

763

381

2

384

101%

Gas

189

189

81

0

108

133%

Location

Onshore

937

931

447

6

490

110%

Offshore

17

21

17

-4

0

0%

Basin

Williston

53

52

28

1

25

89%

Eagle Ford

78

84

37

-6

41

111%

Permian

379

369

177

10

202

114%

Drilling trajectory Directional

74

74

44

0

30

68%

Horizontal

807

804

362

3

445

123%

Vertical

73

74

58

-1

15

26%

US total rig count

954

952

464

2

490

106%

Sources: Baker Hughes and OPEC Secretariat.

Change