Considering the pace at which oil production in the United States is growing, output could reach an all-time high of 10mn barrels per day (bpd) before December 31st this year, a study has predicted.
In a monthly report on latest oil market trends, analysts from consultancy firm Rystad Energy have observed US oil production growing at 95,000 bpd per month during 2017.
The rise in output primarily stems from shale drilling, as the more modest growth from Gulf of Mexico deepwater fields is offsetting declines from other US conventional oilfields.
The historic record of 10mn bpd was reached during November 1970, when US oil prices were still below $3 a barrel. This record was close to being surpassed in 2015 when US production peaked during April at 9.6mn bpd.
Production then dropped 1mn bpd over 18 months, as oil prices fell from above $100 to below $40.
Based on proprietary and detailed well level data, Rystad Energy sees current US production bouncing back twice as fast as it dropped, reaching 9.4mn bpd soon. And, this very steep growth comes with US oil prices locked below the price most analysts estimated as a minimum to grow US oil production.
The US Energy Information Administration has recently released its latest official data for March at 9.1mn bpd.
Rystad Energy believes this implies another upward revision of the EIA’s official oil production outlook for the US, which is now at 9.74mn barrels for December 2017.
“US oil production has grown faster at $50 than any analysts in the market predicted,” Bjørnar Tonhaugen, VP – Oil Markets at Rystad Energy, was quoted in a press release as saying.
“As these numbers are getting confirmed, the initial optimism about OPEC’s temporary cuts, may turn to increasing skepticism about OPEC’s choice of policy once the current output deal expires next year,” Tonhaugen says.
Arabianoilandgas.com maintains that if America withdraws from the Paris Agreement on climate change, which in all likelihood is impending given US President Donald Trump’s election promise and his recent statements opposing the accord, oil production might rise even further to breaching all output records.
