U.S. crude oil output hit a new peak in April of 12.2 million barrels a day
Energize Weekly, July 17, 2019
U.S. crude oil and petroleum liquids production hit a new record in April of 12.2 million barrels a day, according to the federal Energy Information Administration’s (EIA) Petroleum Supply Monthly.
It is the first time U.S. production has surpassed 12 million barrels a day and comes less than a year after domestic production exceeded 11 million barrels a day in August 2018.
Onshore Texas and offshore Gulf of Mexico production reached record levels and accounted for 57 percent of U.S. output. Onshore Texas April production was nearly 5 million barrels a day, and Gulf production was almost 2 million barrels a day.
North Dakota production was 1.4 million barrels a day, followed by New Mexico at 883,000 barrels a day. Oklahoma set a production record at 617,000 barrels a day in April.
“The U.S. onshore crude oil production increase is driven mainly by developing low permeability (tight) formations using horizontal drilling and hydraulic fracturing,” the EIA said.
Crude oil production from tight formations in April 2019 reached 7.4 million barrels a day, accounting for 61 percent of the total domestic production.
Among the tight formations, the Permian Basin in western Texas and eastern New Mexico is driving the record national oil production, the EIA said.
The Permian has multiple tight oil strata, including the Bone Spring, Spraberry and Wolfcamp, which make it a low-cost area for development. The Permian provided 63 percent of Texas production and 96 percent of New Mexico crude oil production.
From January 2018 to April 2019, Texas crude production was up 28 percent, 1.1 million barrels a day, and New Mexico production increased 64 percent, a 345,000 barrel-a-day rise.
The Permian has faced pipeline constraints, with two new lines under construction and a third having receive approval in June. Still, the Permian’s month-over-month growth averaged almost 100,000 barrels a day for most of 2018. “Industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow,” the EIA said.
The agency forecasts Permian production will average 4.4 million barrels a day in 2019, a 920,000-barrel-a-day increase from its 2018 average. Gulf of Mexico production is forecast to average 1.9 million barrels a day in 2019, as 14 new fields are brought online in 2018 and nine fields slated to come online in 2019. The 23 fields are projected to add 200,000 barrels a day, equal to 11 percent of the Gulf’s total production.