U.S. Crude Production Returns To Record Levels

About half of the 400,000 BPD production increase since summer comes from the Permian Basin. Production there continues to grow, albeit at the slowest pace in three years.

One indicator of where U.S. oil production may be headed comes from rig count data, which now shows a 22% decline since last November. On the other hand, the inventory of wells that have been drilled but not yet completed (DUCs) remains near all-time highs at around 8,000 wells. That means there could be a significant lag between the decline in the drilling rig count, and an actual decline in oil production.

Meanwhile, crude oil inventories in the U.S. remain right in the middle of the 5-year average level. These inventories are one of the strongest drivers of crude oil prices, and as long as they are where they are, it will probably be hard to make a bullish case for crude oil prices.

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Author: Robert Rapier

Robert Rapier is a seasoned chemical engineer with three decades of international experience in the energy sector. He holds undergraduate degrees in chemistry and mathematics, and a master’s in chemical engineering. Robert has worked extensively in oil refining, production, synthetic fuels, biomass energy, and alcohol production, earning several patents along the way. As Editor-in-Chief of Shale Magazine and a prolific author for Investing Daily, he shares his expertise through various newsletters and his latest book, American Energy: A History of Power, Progress, and Change. Robert's insights have been featured on 60 Minutes, The History Channel, CNBC, and PBS, among others. His articles have appeared in top publications like the Wall Street Journal, Washington Post, and The Economist. For nearly a decade, he has covered the energy sector for Forbes.