USA Crude Oil Output Growing But Slowing

The U.S. Energy Information Administration (EIA) noted in its latest short term energy outlook (STEO) that it expects U.S. crude oil production to set annual records in 2023 and 2024 but added that growth is slowing.

“We estimate West Texas Intermediate (WTI) crude oil prices will average $83 per barrel over the three years from 2022 to 2024, while annual growth in U.S. crude oil production over the same period will average 0.4 million barrels per day,” the EIA said in its June STEO.

“That compares to average crude oil production growth of 1.1 million barrels per day during the three-year period from 2017 to 2019, when the WTI price averaged only $58 per barrel,” the EIA added.

The changing response to crude oil prices by U.S. producers may reflect a combination of the use of capital to increase dividends and repurchase shares instead of investing in new production, the effects of tighter labor markets and higher costs, and increased pressure on oilfield supply chains, the EIA noted in the STEO.

“Despite this shift from the historical price response , we still expect U.S. crude oil production to continue growing to record levels, driven primarily by production growth in the Permian Basin,” the EIA added.

According to the June STEO, U.S. crude oil production will average 12.61 million barrels per day in 2023 and 12.77 million barrels per day in 2024. Lower 48 states, excluding the Gulf of Mexico, take 10.31 million barrels per day and 10.46 million barrels per day of the total U.S. share in 2023 and 2024, respectively, the STEO shows. The Federal Gulf of Mexico takes 1.88 million barrels per day and 1.91 million barrels per day in 2023 and 2024, respectively, and Alaska takes 0.42 million barrels per day and 0.40 million barrels per day in 2023 and 2024, respectively, according to the STEO.

Looking at a quarterly breakdown, the June STEO projects that U.S. crude oil production will average 12.56 million barrels per day in the second quarter, 12.57 million barrels per day in the third quarter, 12.70 million barrels per day in the fourth quarter, 12.69 million barrels per day in the first quarter of next year, 12.63 million barrels per day in the second quarter of 2024, 12.76 million barrels per day in the third quarter of 2024, and 13 million barrels per day in the fourth quarter of next year.

U.S. crude oil output averaged 11.89 million barrels per day back in 2022, the June STEO highlighted. Last year, Lower 48 states, excluding the Gulf of Mexico, produced an average of 9.71 million barrels per day, the STEO revealed. The Federal Gulf of Mexico produced 1.74 million barrels per day and Alaska produced 0.44 million barrels per day, the STEO outlined.

In its previous STEO, which was released in May, the EIA projected that U.S. crude oil production would come in at 12.53 million barrels per day in 2023 and 12.69 million barrels per day in 2024. In that STEO, Lower 48 states, excluding the Gulf of Mexico, were expected to take 10.21 million barrels per day and 10.37 million barrels per day of the total U.S. share in 2023 and 2024, respectively. The Federal Gulf of Mexico was expected to take 1.90 million barrels per day and 1.92 million barrels per day in 2023 and 2024, respectively, and Alaska was expected to take 0.42 million barrels per day and 0.40 million barrels per day in 2023 and 2024, respectively.

According to EIA data stretching back to January 1983, weekly U.S. field production of crude oil hit a record of 13.1 million barrels per day in the week ending February 28, 2020, and the week ending March 13, 2020. Weekly U.S. field production of crude oil didn’t break above 12.5 million barrels per day the following month, 12 million barrels per day in May 2020, and 11.2 million barrels per day in June 2020, the data shows.

According to the latest data entry, weekly U.S. field production of crude oil came in at 12.4 million barrels per day in the week ending June 9, 2023. The last time weekly U.S. field production of crude oil hit this figure was back in the week ending April 3, 2020, the data outlines.

The lowest weekly U.S. field production of crude oil figure in the EIA data was recorded in the week ending September 30, 2005, at 3.813 million barrels per day.

The EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment, according to its website. The organization was created in response to the need for additional Federal initiatives to collect and disseminate energy-related information, and to evaluate and analyze this information, the EIA’s site notes.

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