U.S. Crude Output Rose to 42-Year High in March, Increasing Glut

U.S. Crude Output Rose to 42-Year High in March, Increasing Glut

By Mark Shenk/Bloomberg

4:00 PM BRT
April 16, 2015

The U.S. pumped crude last month at the fastest pace since February 1973, sending March inventories to the highest level in 85 years.

Crude output climbed 13 percent from a year earlier to 9.32 million barrels a day in March, the American Petroleum Institute said in a monthly report Thursday. Production of natural gas liquids, a byproduct of gas drilling, climbed 9.1 percent to 3.05 million, a record for March. The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S.

“Production of both crude oil and natural gas liquids last month remained at the highest levels in decades even as rig counts reached a five-year low,” John Felmy, chief economist at the API in Washington, said in an e-mailed statement.

Drillers in the U.S. cut the number of active rigs seeking oil last week to the fewest since 2010, according to Baker Hughes Inc. The number of rigs drilling for oil dropped to 760, a decline of 52 percent over 18 weeks, the oilfield services company said April 10 on its website.

Crude stockpiles rose 22 percent from last year to end March at 468.7 million barrels, the highest for the month since 1930. Gasoline supplies climbed 4.9 percent from a year earlier to 231.8 million barrels, the most for the month since 1988.

Refineries processed 15.9 million barrels a day, a record for March. Output of distillate fuel, a category that includes heating oil and diesel, rose 3.1 percent to 4.9 million, also an all-time high for March. Production of gasoline slipped 1.6 percent from a year earlier to 9.38 million barrels a day.

Higher Exports

Exports of refined products climbed 18 percent to 4.56 million barrels a day last month, a record for March. Total imports of crude and fuels rose 5.9 percent from a year earlier to 9.79 million barrels a day in March, the highest level for the month in three years.

Total deliveries of petroleum products, a measure of consumption, climbed 3.4 percent from a year earlier to 19.2 million barrels a day last month, the highest March total since 2011. Demand increased for gasoline, jet fuel and residual oil, while consumption of distillate fuel dropped.

“Demand for petroleum continued to show healthy growth compared to early last year,” Felmy said.

Gasoline consumption rose 2.2 percent to 8.87 million barrels a day as jet-fuel demand climbed 1.9 percent to 1.47 million. Demand for residual oil, used for commercial and industrial heating, electricity generation and ship propulsion, surged 16 percent to 250,000 barrels.

Consumption of distillate fuel slipped 1.7 percent to 3.98 million barrels a day in March.