U.S. Sets New Monthly Oil Production Record

A revision in EIA data pushed November 2017 into the #1 all-time spot for monthly U.S. oil production.

In a recent post, I wrote that the U.S. would almost certainly set a new oil production record this year. I noted that the most recent data from the Energy Information Administration (EIA) showed that last November U.S. oil production exceeded 10 million barrels per day (BPD) for the first time since 1970.

Last week the EIA revised November’s oil production upward, which pushed it into the #1 spot for monthly production. The revision increased U.S. oil production in November to 10.057 million BPD, just edging out the previous record of 10.044 million BPD from November 1970.

U.S. monthly oil production

However, many new records should be set this year, as the EIA projects that oil production will reach 11 million BPD by year-end. This would push the U.S. into first place among the world’s oil producers.

But depending on how it is measured, the U.S. is already #1. The 2017 BP Statistical Review of World Energy ranks the U.S. #1 in oil production, but that’s because they include natural gas liquids (NGLs), which have surged in the U.S. along with natural gas production.

The gains in U.S. oil production are being driven by production gains across tight oil plays in the Bakken and Eagle Ford, and especially the Permian Basin — where oil production is approaching a staggering 3 million BPD. (See What Record Oil Production In The Permian Basin Looks Like).

U.S. tight oil and gas production.

However, the continued gains in oil production are helping keep a lid on oil prices. This also increases the pressure on OPEC to prolong production cuts that have helped drain global crude oil inventories.

Should OPEC end the production cuts, oil prices could quickly drop 20-30% from current levels.

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3 thoughts on “U.S. Sets New Monthly Oil Production Record”

  1. With Libya and Nigeria adding production, higher interest rates, and a possible trade war looming I not expecting a run up in oil prices any time soon. Given that the US can keep oil around $60 or less, how does Saudi Arabia and Iran view the current cap especially regarding the massive need for war support in Yemen and Syria? Would Saudi view lower oil prices as a way to target Iran and gain revenue albeit at a lower price per barrel?
    A 20 to 30% drop in oil used to be a good thing for the US, but not so much anymore.

  2. WSJ article quotes oil guru Gary Ross –
    “Even with a surge in U.S. output, the oil market will be short by more than 800,000 barrels a day this year, according to Mr. Ross.

    At the heart of his forecast is rising demand, especially in India and China. He anticipates that refiners in the two countries will together soak up 1.1 million barrels of crude per day more than last year, offsetting the extra output from U.S. shale.”

    Maybe Libya and Nigeria production increase could offset demand up by India and China?


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