Permian Oil Output Sets Another Record
Production from America’s Permian Basin reached a record high for the third month in a row in January as a red-hot price rally keeps shale drillers busy.
Crude supply from the basin, which includes Texas and New Mexico, averaged 5.06 million barrels a day in January, surpassing the 5 million mark for the first time in data going back to 2007, according to the Energy Information Administration. The agency expects volumes to grow through March.
Permian output continues to exceed every OPEC member, except Saudi Arabia. Production is set to climb even more with oil prices at a seven-year high spurring oil explorers to pump away. The basin has recovered the most quickly from the drop in oil output that ensued when the pandemic hit because of its low production costs. It is spearheading growth in American oil output while other shale regions lag.
The EIA also reported continued recovery in other shale fields. January volumes in the Eagle Ford in South Texas reached the highest since September while North Dakota’s Bakken output was at the highest since December 2020. Supply from the seven major shale regions reached 8.49 million barrels a day, the highest since March 2020.
The previous record for Permian output was set in December. The agency also revised its November volumes higher, surpassing a long-time record set in March 2020.
Despite the steady growth in U.S. supply, the world is in a deficit as demand recovery speeds along, while OPEC+ is failing to meet its quotas. Total U.S. oil output lags pre-pandemic highs seen just before prices plunged in 2020 and forced explorers to slash output.
The surge in output comes amid simmering geopolitical tensions between Russia and Ukraine that have pushed U.S. crude futures to $95 a barrel for the first time since 2014.
--With assistance from Sophie Caronello.
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