The Grind:
Total U.S. oil production has plunged by close to 40%- the most ever- as an unprecedented cold blast freezes well operations across the central U.S., according to traders and industry executives with direct knowledge of the operations.
Crude output has now fallen by more than 4 million barrels a day nationwide, they said, asking not to be identified because the information isn’t public. Before the cold snap, the U.S. was pumping about 11 million barrels a day, according to government data. The estimate of oil production losses has climbed steadily over the last three days as companies and traders assess the situation.
The Details:
Not only do traders and executives now believe losses are larger than previously expected, they also fear they will be longer lasting. The Permian basin- America’s biggest oil field- is the region worst affected, with output down between 65% and 80% from normal levels, traders and executives said.
Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said the production losses were “much higher than initial estimates” and warned that Permian output may not return to pre-freeze levels until Feb. 22. Read more…