EIA revises US oil production estimates lower; June output sank

HOUSTON – The federal government believes daily U.S. crude production fell to 9.3 million barrels in June, down by 100,000 barrels in the prior month, as low oil prices continue to discourage drilling.

The Energy Information Administration said Monday its monthly report on domestic oil supplies, slated to be released in full soon, will use a new approach to collecting production data. Instead of relying largely on state agencies to provide data, it has begun to survey oil companies that drill in 15 states including Texas and the Gulf of Mexico. It’s an effort to improve the accuracy of its monthly estimates of the nation’s oil output.

This has led it to revise its monthly production data for January through May downward by at least 40,000 barrels a day and up to 130,000 barrels a day, with the biggest declines coming from Texas. There was also an uptick in production from the Gulf of Mexico.

Texas’ daily oil production, the EIA said, were revised downward by 100,000 barrels to 150,000 for the first five months of the year. Producers in the Gulf put out 10,000 to 50,000 barrels a day more than the EIA had previously estimated from January to May. The overall average for the year came in at 9.4 million barrels a day.

The agency said it based its previous estimates on tax information and state agencies but “given the timetable for EIA’s data products, much of that information is lagged and incomplete at the time of publication.”

Surging domestic crude production from shale formations in Texas and North Dakota played a big role in the oil-market crash over the past year, but in recent weeks, economic weakness in China and increasing oil supplies from Saudi Arabia and Iraq have overshadowed U.S. crude production as narratives in the market.

The Organization of Petroleum Exporting Countries have put out 1.5 million barrels a day of additional crude into the market, according to Houston investment banking firm Simmons & Co. International, making any production declines in the United States largely negligible. But “we maintain U.S. oil supply still matters in the equation,” analysts at Houston investment banking firm Tudor, Pickering, Holt & Co. wrote in a note to clients Monday.

The EIA said its new oil-company surveys will account for more than 90 percent of U.S. output. Outside of the surveys it collects in 15 energy-producing states, it brings in data from the other 35 states as well through its old methodology.