The US Energy Information Administration (EIA) has published analysis revealing that record-high oil production in the United States is being driven by productivity improvements at wells.
The rig count, which reflects drilling activity at wells, has traditionally been the main determinant of whether oil production rises or falls. As an example, the number of rigs plummeted by 40% in the wake of the COVID-19 pandemic’s economic consequences.
Despite drilling activity actually falling in the country, total oil production has reached 13.3 million barrels per day (bpd) in December last year – some 0.3 million bpd more than the pre-pandemic record set in November 2019.
Shale operators like ExxonMobil, the maker of the Mobil DTE hydraulic oil, have been refining their hydraulic fracturing and horizontal drilling techniques recently. The EIA says this has enabled shale producers to maintain a stable level of production at legacy wells while also producing more oil from new wells. A well is considered to be legacy after a full year of production.
The United States has been the world’s biggest producer since October 2018, when it surpassed both Russia and Saudi Arabia. The most recent EIA data indicates that the country produces around 16% of the world’s crude oil.
Nevertheless, the EIA is expecting to find that production decreased early this year, as some oil companies shut in their operations due to harsh weather conditions in winter. It expects this decline to continue through the year before rising again in 2025, with it being expected to reach a new record high by next February.
