One of my 2023 energy sector predictions was that U.S. oil production would set a new all-time high this year. After record-setting production thus far this year, it would take a collapse along the lines of the huge Covid drop seen in the spring of 2020 for the U.S. to not set a new annual production record for 2023.
For the first three quarters of 2023, U.S. oil production has averaged 12.8 million barrels per day (bpd). The previous annual record — set in 2019 just before the Covid-19 pandemic impacted production —was 12.3 million bpd.
U.S. weekly production at the end of September was 12.9 million bpd. That is 900,000 bpd higher than it was one year earlier. For the entire month of September, production also averaged around 12.9 million bpd, but July’s production was higher than September’s, at 12.99 million bpd. These numbers are just short of the previous monthly record of 13.0 million bpd set in November 2019.
The previous record for half a year of production was set in the second half of 2019 at 12.62 million bpd. But the first half of 2023 has slightly beaten that record with a production level of 12.69 million bpd.
Unless U.S. production averages 2 million bpd lower in the fourth quarter than current production of 12.9 million bpd, then a new oil production record will be set for the year. With nearly a full quarter to go in 2023, my prediction of a new annual production record is nearly baked in now.
Given the fact that the Biden Administration hasn’t exactly been friendly to the U.S. oil industry, some may be puzzled by this production surge. There is a simple explanation. The price of oil, and technological innovations like hydraulic fracturing, are much more significant than any president’s policies.