30/08/2024 by OilStoreAdministrator
The growth in crude oil production in the US is set to accelerate next year, thanks to improvements in well efficiency.
This is according to a new report published by BloombergNEF (BNEF). Previously, the US Energy Information Administration (EIA) predicted that crude oil production will average 13.7 million barrels per day (bpd), while OPEC’s estimate was even more conservative at 13.49 million bpd.
The BNEF forecast is considerably more optimistic at 13.9 million bpd. This would represent an increase of 600,000 bpd over the year, which is around double the expected increase for this year.
In the report, Tai Liu, an analyst at BNEF said:
“Efficiency gains, process improvements and adapting best field practices have allowed oil companies to reduce capital spending while avoiding a decline in well completions.”
The report also mentions that operators are using more advanced fracking techniques and drilling fewer wells, so for every dollar they invest in a well, they are producing more crude oil than before. For example, ExxonMobil, the maker of the Mobil SHC gear oil, said that its acquisition of Pioneer Natural Resources would enable it to roll out its advanced technologies to a wider range of assets.
The news comes after oil prices dropped about 17% from the year’s high on the back of weaker-than-expected Chinese demand. Increased US oil production could contribute to a surplus in the oil market and complicate matters for the OPEC+ group, which is considering rewinding some of its production cuts from the autumn.
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