Despite concerns over limited takeaway capacity in the prolific Permian Basin, the US Energy Information Administration (EIA) reports that US oil production surged to a new record of 11.475 million barrels per day (bpd) in September. This was an upward revision of 428,000 bpd from the IEA’s previous weekly estimate.
The new figure is a 1.1% increase on the previous month and a 21% year-on-year increase for US-based oil producers like ExxonMobil, which also makes lubricants for Mobil UK stockists. While the Gulf of Mexico showed lower production, this was more than compensated for by increases in Texas, Alaska, and North Dakota. The upward revision is likely to be also reflected in future weekly data from the IEA and its outlook for 2019.
Thanks to the upwardly revised figure, the US edged out Russia to remain the world’s biggest oil producer. Unlike production growth in the US, which is yet to show signs of plateauing, Russia’s oil production is down slightly from its post-Soviet high in October. Data from the Russian Energy Ministry showed oil production dropped from 11.41 million bpd in October to 11.37 million bpd in November.
Nevertheless, the growing US oil production presents a problem for countries that rely on the revenue generated by higher oil prices, because US supply growth alone is outpacing any increase in demand. Organizations like OPEC are particularly concerned that oversupply will trigger a return to the huge global inventories that caused oil prices to plummet in 2016.