The Northern Irishman, who won the 2010 US Open at Pebble Beach, reached the halfway stage with a one-over-par 141 that left him near the top of the leaderboard.
While most of the world's top golfers were left struggling just to survive on the treacherous course, McDowell was in his element, plotting his way around the par-70 layout.
"I played some really nice golf the last two days," he said.
"I made enough birdies to kind of offset some mistakes which I think is key.
"If you can make some birdies on this golf course, it really gives you a little bit of a cushion."
McDowell had four birdies on Friday and got to two under before losing some ground late in the round with three bogeys in his last four holes.
"That's what this golf course can do to you in a heartbeat," he said. "To be honest with you, if you had offered me one-over par starting on the first tee yesterday, having seen what I saw yesterday morning, I would have probably snapped your arm off for it."
McDowell won the 2010 US Open when he shot even par in similarly tough conditions but said there is no comparing Pebble Beach and Olympic Club, which are only about two hours apart.
"I guess that the similarity is that level par is going to be close to winning (and) the breeze coming in off the Pacific Ocean has the same kind of chill and the same heaviness to it," he said.
"But it's a different golf course though. Pebble was so short and you really had to be disciplined coming into the greens.
"There is a certain element of discipline required around here as well but it's a bigger golf course requiring a lot more precise is the wrong word, a lot more big shots."
Despite being one of the few players to get around the Olympic Club close to par, McDowell was not making any bold predictions about his prospects over the weekend, when the course is expected to play even harder as the green firm up.
"It's just tough to have fun out there, I got to be honest with you," he said. "It's just a brutal test of golf."