According to the latest data from the US Energy Information Administration (EIA), the US set a new record for oil production for the second month in a row in September.
Production of crude oil and condensate increased by 224,000 barrels per day (bpd) between August and September to reach 13.24 million bpd.
This is 750,000 bpd (or 7%) higher than the same month in 2022. Most of the monthly increases came from the Lower 48 states and the federal waters of the Gulf of Mexico, although there was also a slight increase in Alaska’s productions.
US producers have benefitted from production cuts by the OPEC+ group, including sizeable voluntary additional cuts by Saudi Arabia and Russia, which have served to support oil prices at relatively high levels. Nevertheless, the price of crude futures has fallen since summer last year, and this has been reflected in a falling number of active rigs over the past months.
Despite this, production growth in the Lower 48 states shows few signs of abating. This is largely thought to be due to operators like Chevron, the maker of Texaco grease and lubricant products, focusing on the most promising players and using technological enhancements to improve recovery rates. This includes drilling longer horizontal wells to increase the level of contact with oil-bearing rock.
Growing production in the US and other countries presents a problem for the OPEC+ group, because it needs to control enough of the world’s crude oil production to act effectively as a collective swing producer.
