A record volume of crude oil was produced in the US last year according to the latest Petroleum Supply Annual published by the Energy Information Administration (EIA).
Average daily production over the year stood at 13.3 million barrels per day (bpd), maintaining the country’s status as the world’s biggest oil producer. The shale oil revolution had previously helped achieve record production of 12.9 million bpd in 2019, before COVID-19 lockdowns triggered a downturn in the oil markets.
Production in the Permian Basin alone exceeded 7 million bpd despite every barrel fetching about $12 less than it did the previous year. Operators like Chevron, the maker of the Texaco grease range, have been incrementally refining production methods there. Combined with prioritising the most promising assets, this has enabled production to continue growing even with relatively low oil prices. Some modest offshore production gains were also made in the Gulf of Mexico.
Nevertheless, while the shale boom saw production jumping by over a million bpd in some years, the pace of growth has slowed somewhat. Production rose by approximately 120,000 bpd last year, suggesting that production in the country is plateauing. Oil prices are largely expected to remain around the $60s for now as the OPEC+ group gradually restores its curtailed production. The EIA predicts a slight production rise to 13.4 million bpd this year, but it then expects lower prices to put pressure on operators to cut production. Further innovation in the industry or movements in the markets could of course change this.
