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).

17 Apr 2020
  • 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.

Permian Basin Weekly Flare Count in 2020 vs. 2019 (% y/y)

Source: UBS Evidence Lab

Saudi Arabia Weekly Flare Count in 2020 vs. 2019 (% y/y)

Source: UBS Evidence Lab