The Weakness In US Crude Oil Production Is Just Getting Started
EIA reported an all-time high in US crude oil production for March 2025, clocking in at 13.488 million b/d. While some may take this as a sign of US shale's resilience amidst the oil price downturn, this is the last hurrah before the multi-month decline starts. EIA's reporting methodology also makes it susceptible to underestimation, followed by overestimation, as we will explain below.
But first things first, you can see that EIA reported March US crude oil production at 13.488 million b/d with -10k b/d in adjustment. This makes the effective crude oil production 13.478 million b/d.
This is ~63k b/d higher than our estimate of 13.415 million b/d.
According to our real-time data, the discrepancy in EIA's data came in February when it reported lower headline figures than we expected. Even after the revised data, the 13.24 million b/d for February was lower than the 13.413 million b/d we had. I suspect that some of the overstated headline production in March is to compensate for the understated production in February.
Editor's Note: This has happened frequently in the past. You can see the disproportional spike (orange line) following periods of under-reported production.
Looking at US crude oil production on a 3-month moving average basis, the Q1 average was 13.149 million b/d. January US crude oil production was impacted due to freeze-off (weather), while February was marginally impacted. In aggregate, Q1 US crude oil production is ~400k b/d below the consensus estimate and explains in large part why global oil inventories failed to build.
Looking Ahead
For the people unaware of the data, they will look at March US crude oil production and conclude that US shale is defying gravity when the reality is the opposite.