New EIA crude production method out Monday

OREANDA-NEWS. August 31, 2015. Monthly US crude production data to be released on 31 August by the Energy Information Administration (EIA) will be based on a new methodology which could lead to revisions of production figures for this year.

The EIA has shifted to a method based on a direct survey of oil producers in 15 states, including Texas, Oklahoma, Louisiana, North Dakota and New Mexico. The agency uses a similar method to calculate monthly natural gas output. The EIA's previous method of calculating state monthly crude production relied on this state agency-provided data and also on adjusted state data from third party sources.

The new monthly report will have fresh production data for June 2015 and revised figures for January through May of this year.

It's difficult to say how the January to May data collected using the new method will compare to the older data set, and whether that will change how analysts look at US production in the future. But any large change in US oil production figures could impact crude markets, said Tudor Pickering Holt analyst David Pursell, as traders are focused on three major themes — the Chinese economy, Opec, and US supply.

The new methodology should provide a better regional breakdown and a good assessment of Texas and other key states. Changes the EIA made previously in its natural gas production data have been well-received by the market and have produced "a very effective data set," Pursell said.

The EIA made the changes because crude production data from state agencies — including the Texas Railroad Commission — is often incomplete or lagging. Information published by the Texas Railroad Commission, the agency that oversees oil and gas development in the top US-producing state, often differs with data put out by the EIA because of differences in the treatment of incomplete and delayed information.

The new system should garner about 95pc of crude production in the Lower-48 states, the EIA said.

EIA administrator Adam Sieminski, the former chief energy economist at Deutsche Bank, has been advocating for changes to EIA's various data reports since he became the chief of the Energy Department's research and analytical arm in May.

Sieminski has also pledged to provide more data on oil that moves by rail and truck, which has increased vastly because of limited pipeline capacity out of shale formations like the Bakken.