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US oil production on the rise

According to the new monthly report from the US Energy Information Administration (EIA), oil production in the US is rising once more, although it still has some way to go before it reaches pre-pandemic levels.

Average oil production increased by 286,000 barrels per day (bpd) from August to September, according to the EIA, but this was still some 1.635 million bpd less than the same month last year. The increase is also not uniform across the different sectors of the US oil industry.

In response to the drop in demand caused by the COVID-19 pandemic, US operators like ExxonMobil, the oil major that produces the Mobil range of lubricant products, cut their capital spending and operating costs to improve efficiency. This has inevitably led to focuses shifting to more profitable assets.

In this case, the increase seems to have come mostly from a 315,000 bpd increase in offshore production in the Gulf of Mexico. The shale industry, which was mostly responsible for the country’s resurgent production in recent years, seems to be slower to recover.

Oil production in Texas, which includes most of the prolific Permian Basin, dropped slightly in September, and it was more than a half a million bpd lower than the same month last year. Colorado’s production also declined, and with new regulations coming into force in the state next year, this trend may continue as it becomes harder to attract oil and gas developers. North Dakota, however, did see a modest increase to 1.215 million bpd.

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