Markets > Commodities

U.S. monthly crude oil production sets new record

Xinhua Financein ​HOUSTON
2018-11-02 10:13

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U.S. monthly crude oil production exceeded 11 million barrels per day (b/d) in August 2018, making the country the leading crude oil producer in the world, the U.S. Energy Information Administration (EIA) said on Thursday.

According to EIA's latest Petroleum Supply Monthly, U.S. crude oil production reached 11.3 million b/d in August 2018, up from 10.9 million b/d in July. This is the first time that monthly U.S. production levels surpassed 11 million b/d.

Monthly crude oil production in several U.S. states reached a record high. Texas had the highest record level at 4.6 million b/d, followed by North Dakota at 1.3 million b/d. New Mexico, Oklahoma, Colorado, and West Virginia also had record-high production levels.

The Permian region, which is located in western Texas and eastern New Mexico, accounts for about 63 percent of total Texas crude oil production and 95 percent of total New Mexico crude oil production.

From January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d, or 15 percent, and New Mexico production increased by 182,000 b/d, or 25 percent.

The growth in Texas and New Mexico has surpassed EIA's previous expectations, which assumed that pipeline capacity constraints in the Permian region would dampen the production growth. However, industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue accelerating at a higher rate than EIA expected.

U.S. crude oil production has increased significantly during the past 10 years, driven mainly by production from tight oil formations using horizontal drilling and hydraulic fracturing. EIA estimates of crude oil production from tight formations in August 2018 reached 6.2 million b/d, or 55 percent of the national total.

WTI-Cushing spot prices averaged about 68 dollars per barrel in August, down from the July average of 71 dollars per barrel. EIA's Short-Term Energy Outlook forecasts the average spot price for WTI to remain near that level in the fourth quarter of 2018.

The higher crude oil prices at the end of 2018 and throughout 2019 will likely support increased U.S. crude oil production. EIA forecasts that U.S. crude oil production will increase by 1.0 million b/d in 2019.
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