After a harsh winter in January that reduced oil and gas output, US drillers are ramping up again, with the February average daily gaining 600,000 bpd from January, according to data from the Energy Information Administration.
In the first month of the year, production dropped by 700,000 bpd from the previous month, however, so there is still some rebounding due to the return to end-2023 production levels.
Severe winter weather prompted cuts in production in January, with North Dakota alone having to slash output by as much as 650,000 barrels daily. The weather also caused the temporary shutdown of TotalEnergies’ refinery in Port Arthur.
Yet a month later output was already ramping up, the data shows, with North Dakota producers adding close to 300,000 bpd to their daily average between January and February. There is still a way to go but winter is over so it shouldn’t take long.
Meanwhile, the US remains the world’s largest producer of crude oil and gas. Last year, oil production hit yet another all-time high of over 13 million barrels daily. Last year saw surprisingly strong growth in shale oil output that surprised a lot of observers because rig count changes did not point to such a development. Quite the contrary, the count led many to believe growth would be weak.
Yet as the rig count fluctuated, drillers managed to improve well productivity, in some cases even more than they themselves expected, ultimately boosting the national total. This year, however, this may change, with production growth seen by the EIA and the industry slowing down. There is little incentive to keep boosting production, industry executives are saying. This is because of weak natural gas prices and rising production costs.
Per Enverus, US oil production this year will expand by some 230,000 bpd. Per the Energy Information Administration, growth will come in at 260,000 bpd.
By Irina Slav for Oilprice.com
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