by. P. Homewood, Mar 13, 2022 in NotaLotofPeopleKnowThat
This single chart from the US EIA explains just why oil prices are shooting up there:
https://www.eia.gov/petroleum/production/
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The oil boom initiated by Trump saw crude oil output increase by a half between 2016 and 2019.
Output naturally collapsed in early 2020 as a result of the pandemic, which affected both supply and demand. But since then output has only slowly recovered, and is still 9% below 2019 levels.
It is worth pointing out that demand in 2021 was still not back to 2019 levels. Assuming it recovers this year, it is likely to put further upward pressure on prices, unless production increases as well.
To put the numbers into perspective, the US produces a sixth of the world’s crude oil. The increase US output between 2016 and 2019 was 205 million tonnes, and represents 5% of global output.
Small changes in supply have a disproportionate effect on international oil prices, because demand is so inelastic. An extra 5% on world production would have a significant impact on prices.
While overall production will decline this year due to the drop in drilling activity, almost all of the curtailed production is expected to be back online by September.
JULY 8, 2019 U.S. crude oil production surpassed 12 million barrels per day in April
U.S. crude oil production and lease condensate reached another milestone in April 2019, totaling 12.2 million barrels per day (b/d), according to EIA’s latest Petroleum Supply Monthly. April 2019 marks the first time that monthly U.S. crude oil production levels surpassed 12 million b/d, and this milestone comes less than a year after U.S. crude oil production surpassed 11 million b/d in August 2018.
Texas and the Federal Offshore Gulf of Mexico (GOM), the two largest crude oil production areas in the United States, both reached record levels of production in April at 4.97 million b/d and 1.98 million b/d, respectively. Oklahoma also reached a record production level of 617,000 b/d.
The U.S. onshore crude oil production increase is driven mainly by developing low permeability (tight) formations using horizontal drilling and hydraulic fracturing. EIA estimates that crude oil production from tight formations in April 2019 reached 7.4 million b/d, or 61% of the U.S. total.
From the International Energy Agency’s Oil Market Report (OMR):
Home » Newsroom » News » 2018 » October
OMR: Twin Peaks
12 October 2018
Both global oil demand and supply are now close to new, historically significant peaks at 100 mb/d, and neither show signs of ceasing to grow any time soon. Fifteen years ago, forecasts of peak supply were all the rage, with production from non-OPEC countries supposed to have started declining by now.
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