What Is Barrels Per Day (B/D)?
Barrels per day (B/D) is a measure of oil output, represented by the number of barrels of oil produced in a single day. For example, you might hear "country ABC has the potential to produce five million barrels per day." The abbreviation "bbl/d" can also be used to represent this production measure. Oftentimes there is an inverse correlation between the number of barrels produced on a daily basis and the price of oil.
- Barrels per day (B/D) refers to the number of barrels of oil produced in a single day.
- Barrels per day (B/D) can refer to an amount globally, a single country, a single production field, and so on.
- The price of oil and barrels per day (B/D) typically have an inverse correlation.
- Countries or companies often don't produce oil at their full barrels per day (B/D) capacity as a means to control the price of oil.
- Other measurements of oil production include a million barrels per day (MMB/D), a thousand barrels per day (KBPD), and for other energy products, a barrel of oil equivalent (BOE).
Understanding Barrels Per Day (B/D)
The barrels-per-day (B/D) measure is commonly used in the oil spot markets, as prices are usually quoted in terms of dollars per barrel. One barrel of oil contains approximately 42 U.S. gallons, or 35 imperial gallons, and weighs approximately 0.134 tons.
Just because a country has the capacity to produce X number of barrels per day, it doesn't always mean they are producing that much. The price of oil is largely influenced by the currently available supply.
The currently available supply is driven by the number of barrels per day each oil-producing company creates. When the price of oil starts to fall, the world's oil-producing countries may make agreements with each other to limit production until the price of oil stabilizes and returns to a higher level.
The Organization of the Petroleum Exporting Countries, or OPEC, is an entity founded in 1960 that consists of 13 member countries that cooperate with each other when producing and exporting their oil to the rest of the world. The Organization of the Petroleum Exporting Countries has a large amount of influence over global barrels per day oil production and the price of oil worldwide.
The reason oil production is referred to barrels is that when oil was first discovered in Pennsylvania, it was stored in whiskey barrels. The amount in a barrel specifically refers to crude oil.
Barrels per day (B/D) is the base measurement when referring to how much oil is produced. The oil industry also uses other measurements, such as million barrels per day (MMB/D). Similarly, the oil industry measures a thousand barrels per day (KBPD). Depending on the region, the abbreviations can be slightly different, so when evaluating the oil industry or any elements of it, it is in good interest to familiarize yourself with the different terminology.
Another common measurement is a barrel of oil equivalent (BOE). This is used when converting the energy found in nonoil products, such as natural gas, into the equivalent of a barrel of oil. This makes it easier for analysts and investors to understand the production value of an energy company.