U.S. Oil Notches Record Growth

NCPA June 18, 2013

U.S. crude oil production grew by more than 1 million barrels a day last year, the largest increase in the world and the largest in U.S. history. Flowing oil fields from North Dakota to south Texas helped keep the global market adequately supplied and helped markets weather declining oil production elsewhere in the world, says the Wall Street Journal.

• In the latest sign of the shale revolution remaking world energy markets, crude production in the United States jumped 14 percent last year to 8.9 million barrels a day, according to the newly released Statistical Review of World Energy.
• In volume terms, last year's U.S. production gain of 1.04 million barrels a day surpassed the earlier biggest annual increase of 640,000 barrels per day, recorded in 1967.

Despite rising U.S. production, the nation remains a large crude importer. However, it is bringing in fewer barrels than at any time since the mid-1990s. That is freeing up some traditional suppliers to ship their barrels elsewhere and satisfy rising demand in Asia and Latin America.

While the U.S. shale boom increased production, many other oil-producing regions struggled with declining volumes.

• U.K. production fell 13.4 percent in 2012, as some of its North Sea oil fields near their fourth decade of life.
• Indonesia, a former Organization of the Petroleum Exporting Countries member, experienced a 3.9 percent decline.

While U.S. production tamped down the effect of supply problems elsewhere, BP noted average oil prices remained at record-high levels last year. The prices reflect relentless demand for oil from developing countries, including China, India and most of the Middle East.

The World Bank forecast global oil prices would drop to $102 a barrel this year from $105 last year, based on an average of global benchmarks. It added that "over the longer term, oil prices are projected to fall" as supply growth from shale-rock deposits accelerate.

Source: Keith Johnson and Russell Gold "U.S. Oil Notches Record Growth: Rise in Production Is World's Largest; Fueled by Fracking," Wall Street Journal, June 12, 2013.