Crude oil prices rose for the majority of 2016, but oil production fell to 8.9 million barrels per day last year, from 9.4 million barrels per day in 2015, according to the U.S. Energy Information Administration. In the first three quarters of 2016, production fell to 8.6 million barrels per day in September, from 9.2 million barrels per day in January 2016. However, production started to increase in the last quarter, rising to 8.8 million barrels in December.
Price differences narrowed between Brent and West Texas Intermediate (WTI) crude oil last year, “which made crude oil imports relatively more attractive and caused total imports of crude oil in 2016 to also increase,” according to the EIA. The Brent spot price rose to $53 per barrel in December, from $31 per barrel in January 2016. Over the same period, the WTI spot price rose to $52 per barrel, from $32 per barrel, and this was the largest average price increase since 2009. The November decision by the Organization of the Petroleum Exporting Countries (OPEC) to cut production led to “further price increases at the end of 2016 in anticipation of some level of member country compliance with the production cuts.”
Average oil production was 1.3 million barrels per day more than the five-year average. Production in the Permian Basin rose to 2.1 million barrels per day in December, from 1.9 million barrels per day in January 2016. In the Federal Offshore Gulf of Mexico, production was 1.6 million barrels per day, “the highest annual production ever recorded for that region,” according to the EIA.
Crude oil imports rose to 7.9 million barrels per day in 2016, nearly 515,000 barrels per day more than in 2015. Crude oil exports increased 12% to 520,000 barrels per day in 2016, after export restrictions were removed on U.S. produced oil. Oil inventories rose 35 million barrels to 484 million barrels in 2016, from 2015.