The US Will Soon Be the World’s #1 Crude Oil Producer
The EIA sees Crude Oil production climbing next year even with transportation bottlenecks in the country’s most prolific tight (shale) oil play.
The Energy Information Administration (EIA) sees US Crude Oil output averaging 11.8-M BPD in Y 2019, up from its 11.76-M BPD estimate in the June outlook.
“In 2019, EIA forecasts that the United States will average nearly 12 million barrels of crude oil production per day,” said the Administrator of the EIA. “If the forecast holds, that would make the US the world’s leading producer of Crude.”
US Crude Oil output has remained above the 10-M BPD mark since February. That is while Saudi Arabia told OPEC it pumped about 10.5-M BPD last month as the Kingdom sought to cap rallying prices by ramping up output.
Concerns linger over the worsening bottleneck in the biggest US shale region, the Permian Basin, and how that might affect domestic output in 2-H of this year.
Due to limited pipeline transportation in the region, production may start to slow in the area.
The EIA left its average domestic output forecast for this year unchanged at 10.79-M BPS, above the Y 1970 record of 9.6-M BPD, according to the agency’s Short-Term Energy Outlook released Tuesday.
Its global Crude Oil production forecast for next year was raised to 102.54-M BPD from a prior forecast of 102.21-M BPD. The agency’s world demand growth estimate for Y 2019 was lowered.
In the face of rising global oil prices, members of the OPEC cartel and a few non-members including Russia agreed last month to ease production caps that had contributed to the run-up in prices.
US President Donald Trump urged the Saudis to pump more Crude Oil to contain rising prices. The King said his country has a reserve of 2-M BPS that could be tapped “if and when necessary.”
The United States led the world in Crude Oil production for much of the 20th Century, but the Soviet Union surpassed America in Y 1974, and Saudi Arabia did the same in Y 1976, according to Energy Department figures.
By the end of the 1970’s the USSR was producing 33% more Crude Oil than the US, and by the end of the 1980’s, Soviet output was nearly 2X that of the US
The last 10 years has seen a revolution in American energy production led by techniques including hydraulic fracturing, or fracking, and horizontal drilling.
Those innovations helped the US narrow the gap.
Last year, Russia produced more than 10.3-M BPD, Saudi Arabia pumped just under 10-M, and the US came in under 9.4-M BPD, according to US government data.
EIA forecast that US Crude Oiloutput will average 10.8-M BPD for all of Y 2018 and 11.8-M BPD in Y 2019..
The trend of rising US output prompted the executive director of the International Energy Agency (IEA), to predict this spring that the US would leapfrog Russia and become the world’s largest producer by next year if not sooner.
A potential obstacle for US drillers is a bottleneck of pipeline capacity to ship Crude Oil from the Permian Basin of Texas and New Mexico to ports and refineries.