Annual U.S. crude oil production reached another record level at 12.23 million barrels per day in 2019, or 11 percent more than 2018 levels, according to U.S. Energy Information Administration Monday.
U.S. crude oil production has increased significantly during the past 10 years, driven mainly by production from tight rock formations developed using horizontal drilling and hydraulic fracturing to extract hydrocarbons.
However, the 2019 growth rate was down from a 17 percent growth rate in 2018.
Texas continued to produce more crude oil than any other state or region of the United States, accounting for 41 percent of the national total in 2019.
In its latest Short-Term Energy Outlook which was released on Feb. 11, EIA forecast U.S. crude oil production will continue to increase in 2020 to an average of 13.2 million barrels per day and to 13.6 million barrel per day in 2021. Most of the expected production growth will occur in the Permian region of Texas and New Mexico.
As demand collapse concerns continued to dominate the market amid further spread of the COVID-19, oil prices plunged last week, and are expected to run under pressure.
“While the pace of reported new COVID-19 outbreaks in China has begun to slow, it remains to be seen what the global impact is, as more cases emerge and travel restrictions and quarantine efforts are becoming more widespread in regions outside of China,” Goldman Sachs analysts said in a note last Thursday.
Market participants are hoping that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, will announce greater production cuts to prop up the prices.
In December 2019, the OPEC+ group agreed to deepen production cuts by an additional 500,000 barrels a day, bringing the total cuts to 1.7 million barrels daily. The OPEC and its allies are scheduled to meet in Vienna later this week. Enditem