Lower 48 output falls to 50-year low

U.S. Lower 48 oil production was 4.8 million b/d in January, the lowest in more than 50 years and down 6% from January 1998, the American Petroleum Institute said.

Alaska, which accounts for a fifth of U.S. production, saw its output plunge 15% in January. API said that, over the past 4 years, Alaska's decline has averaged 5-8%/year, and the state's output now is more than 60% below its March 1988 peak of nearly 2.1 million b/d.

It said that, adjusted for inflation, oil prices are at their lowest level since the great depression of the 1930s and have resulted in shut-in wells and delayed production projects.

API said that recently released federal employment data show 11,500 people in the U.S. oil and gas production industry lost their jobs in January.

That 3.7% employment decline was the largest 1-month drop since 1986. API said that, since yearend 1997, the industry has lost 42,000 jobs, a drop of more than 12%.

API estimated U.S. wellhead prices last month averaged just $9/bbl, down 33% from January 1998 and nearly 60% from January 1997.

Compared with a year ago, U.S. drilling rig activity fell more than 40%, with only 125 rigs searching for oil in January, about a third of the total in January 1998.

Supply/demand

U.S. imports of crude and petroleum products were 9.785 million b/d in January, off 1.1% from prior-year levels. Imported crude averaged 8.01 million b/d, down 2.1%.

API said that U.S. gasoline deliveries-a key measure of demand-rose 5% to 7.973 million b/d in January, pushed by record low inflation-adjusted retail gasoline prices that are down 25% from 1996 and 1997.

U.S. distillate deliveries were up 3.6% at 3.693 million b/d in January vs. the same time a year ago, kerosine jet fuel deliveries were up 6%, and residual fuel deliveries fell 10% to 796,000 b/d.

U.S. distillate stocks in January were up 12.2% on the year at 149.3 million bbl, gasoline inventories were up 2.7% at 226.9 million bbl, and crude oil stocks were 2.9% higher at 330.2 million bbl.