U.S. oil output climbed to nearly 12 million bbl/d in August, government figures showed on Oct. 31, the highest since the onset of the COVID-19 pandemic, even as shale companies have said they do not see production accelerating in coming months.
U.S. crude prices have hovered around $85/bbl after surging into triple-digits this year and boosting fuel costs for consumers. President Joe Biden has called on oil companies to boost production to reduce fuel prices.
Overall U.S. output peaked at 13 million bbl/d in late 2019, and has not returned to that level since the pandemic started as rigs have been shut in and as costs for equipment and labor increased rapidly.
Several U.S. shale producers recently said well results are disappointing, and production is falling short of forecasts.
“You’ll see production tick higher, but I don't think we’re going to go ripping higher to 13.1 million barrels,” said Bob Yawger, director of energy futures at Mizuho in New York.
A little over two years after the pandemic wrecked havoc on demand and slashed profits, four of the five largest global oil companies brought in roughly $50 billion in net income in the most recent quarter. Most major oil majors and large, listed producers are focused on returning profits to shareholders through share buybacks and dividends.
U.S. upstream oil companies are expected to bank a 68% increase in free cash flow per barrel in 2022, while output growth lingers at 4.5% year to date, Deloitte said last week.
Crude production rose 0.9% to 11.98 million bbl/d in August, highest since March 2020, the U.S. Energy Information Administration (EIA) said in monthly figures.
Natural gas production in the U.S. hit another record, with gross output in the Lower 48 states rising 600 MMcf/d to 110.6 Bcf/d in August.
That topped the prior all-time high of 110 Bcf/d in July.
In top oil producing states, monthly output rose 1.6% to 5.1 million bbl/d in Texas and 0.6% to a record 1.58 million bbl/d in New Mexico, but fell 0.5% to 1.06 million bbl/d in North Dakota. Texas’s output is at a level not seen since April 2020.
In top gas producing states, monthly output rose 0.9% to a record 31.3 Bcf/d in Texas and fell 1.5% to 20.4 Bcf/d in Pennsylvania, lowest since November 2020.
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