Energy What can flaring data tell us about the effect of low oil prices?
Increased supply and Covid-19-related demand destruction have led to the largest drop in oil prices since 1991. US producers are responding with spending cuts. Natural gas produced as a byproduct of oil drilling is often burned (flared).
- Satellite data on flaring can provide an indication of oil-producing activity.
- Daily satellite data suggests activity in the Permian basin, the top-oil-producing region in the US, has dropped nearly 35% y/y.
- Permian flaring has not fallen to zero because existing wells continue to produce.
- Saudi flaring has increased more than 16% y/y.
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Permian Basin Weekly Flare Count in 2020 vs. 2019 (% y/y)
Saudi Arabia Weekly Flare Count in 2020 vs. 2019 (% y/y)
