U.S. oil price drops to 50-year low

U.S. oil prices, adjusted for inflation, have hit their lowest level in more than 50 years. American Petroleum Institute said that composite U.S. wellhead oil prices in November averaged less than $10/bbl, more than 40% lower than the same time a year ago. API said U.S. oil output was 6.252 million b/d, down 3.2% from November 1997.

Dec. 21, 1998

2 min read

U.S. oil prices, adjusted for inflation, have hit their lowest level in more than 50 years.

American Petroleum Institute said that composite U.S. wellhead oil prices in November averaged less than $10/bbl, more than 40% lower than the same time a year ago. API said U.S. oil output was 6.252 million b/d, down 3.2% from November 1997.

It said that, consequently, only 190 rigs targeting oil were active in November, the lowest number on record and a 50% plunge since November 1997: "By contrast, there were usually 300 to 400 rigs drilling for oil in the U.S. between 1992 and last year, and even during the late 1980s oil bust, rigs drilling for oil exceeded 750 at times."

Other statistics

November U.S. crude imports were 8.806 million b/d, up 5.3% from November 1997. Crude and products imports rose 8.4% to 10.787 million b/d.

U.S. gasoline deliveries, a key demand indicator, increased 4.5% from November a year ago to 8.323 million b/d, which API said was a response to low retail prices. Year-to-year growth in gasoline deliveries has averaged about 3% in recent months.

API said that the last time gasoline deliveries increased that strongly was in 1986.

API said abnormally warm weather in November caused a 2.1% decrease in U.S. distillate fuel oil deliveries to 3.362 million b/d, compared with November 1997. However, distillate stocks of 150.1 million bbl were 6.7% higher. Kerosine jet fuel deliveries in the U.S. were down 2.3% at 1.575 million b/d, and residual fuel deliveries were up 8.4% at 877,000 b/d. Crude stocks were 4% higher at 336.6 million bbl, and total petroleum inventories were up 3% at 1,066,700,000 bbl, both compared with November 1997. U.S. refineries operated at 93.8% utilization in November.