Posted on Leave a comment

US crude oil production to set new record

The US oil industry will beat its pre-pandemic record for crude oil production, according to new data from the US Energy Information Administration (EIA).

The previous record of 12.3 million barrels per day was set in 2019. Following this, the arrival of the coronavirus and the resulting lockdowns and travel restrictions caused a steep decline in the demand for crude oil, leading to many oil producers paring back their investment in new production capacity.

Since then, despite a strong recovery in oil prices, the large oil producers in the US—such as Exxon Mobil and BP, the maker of Castrol lubricant products—have focused on satisfying their shareholders, rather than growing output. This may be about to change, however.

Steve Nalley, the Acting Administrator of the EIA, said in a statement that the organisation expects the world’s demand for hydrocarbon-based products:

“To return to and surpass pre-pandemic levels this year, but crude-oil production grows at a faster rate in our forecasts. We expect that as crude oil production increases, inventories will begin to replenish and help push prices lower for gasoline, jet fuel, and other products in the short term.”

The growth in oil production is unlikely to be led by the large producers, however. Many analysts believe that smaller operators will drive it thanks to not being subject to shareholder pressure, with them generally being funded by private equity or family-owned businesses. Natural gas production is also expected to reach a new record in the same year.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.