While U.S. oil production is on course to hit a record high this year, there are rising doubts about whether the output growth can continue.
U.S. oil production is expected to hit a record high this year, but there is uncertainty as to whether the current growth can continue.
In fact, the latest factual data, for June, showed that level has already been reached. Yet, at the same time, exploration and production companies are drilling fewer wells and keeping a cap on their investments in more production. And oil prices have fallen substantially over the past year. The EIA said that this year, oil production will hit 12.8 million bpd, which it called an annual record, and grow further to 13.1 million bpd in 2024, which would be another record.
Indeed, drilling activity is on the decline, especially in the shale patch. During the second-quarter reporting season in July, all major oilfield service providers“During the second quarter, we saw reduced frack activity that resulted in increased white space in our calendar.” Indeed, Brent crude was trading at around $95 per barrel in early September 2022 and, after it registered some drops to below $75 per barrel earlier this year, was trading at around $88 per barrel at the time of writing, on track to rebound to $90 should the supply-and-demand picture remain unchanged.
Indeed, if this year’s annual average is 12.8 million barrels daily, as the EIA predicts, the above statement would be true. Not everyone agrees it has anything to do with the administration, however.
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