Up, up and away.Despite falling rig counts, US oil production continued to climb to an all-time high of 13.05 million barrels per day (bpd) in August, according to the latest numbers from the Energy Information Agency (EIA).That surpassed the previous monthly high of 13 million bpd recorded in November of 2019, according to the US government’s energy data aggregator — not to be confused with the Paris-based International Energy Agency (IEA) — and is almost one million bpd higher than this time last year.It comes even as the next leading contenders, Russia and Saudi Arabia, each lost market share by cutting production in an attempt to prop up prices. In fact, US production gains have almost entirely offset OPEC’s own 1 million bpd of output cuts..In its latest production report, the EIA notes the 9% production increase was achieved despite a 20% drop in the number of active drilling rigs due to greater drilling efficiencies, especially in Texas’ Permian shale basin which now accounts for about 5.6 million bpd, up from 5.1 million bpd last year — which is roughly equivalent to Canada’s.Fewer rigs means lower costs, and lower cost production additions which is also a sign US producers aren’t overspending this time.The new record comes shortly after supermajor ExxonMobil spent USD$60 billion to buy fellow Permian player Pioneer Natural Resources in a sign that production is poised to rise even further.Substantial gains were also seen in New Mexico and North Dakota, which rank as the second and third largest producing states, respectively. Production from offshore federal waters in the Gulf of Mexico actually fell about 2.2% or 40,000 bpd in July. US oil production has been steadily gaining steam since 2010 when it fell to just 5.5 million bpd. And it’s almost 30% higher than peak pandemic levels, when it fell to 10 million bpd..That said, it still consumed about 20 million bpd in 2022, according to the EIA. Although it imported about 6.3 million bpd — mostly heavier, cheaper oil from Canada — it exported another 3.6 million bpd of its own higher value production for a net import balance of about 2.7 million bpd.The EIA numbers include natural gas liquids produced at the well head, which are often counted as oil.According to Goldman Sachs, the growth in US oil production continues to be the economic miracle of the 21st Century. It expects the Lower 48 will continue to outpace the rest of the world and exceed IEA expectations for the 13th year in a row.According to Sachs’ commodity analyst Daan Dtruyven, "the US has driven all the growth in global oil supply over the past decade and the past year, and the Permian basin has driven all growth in US crude supply since early 2020."
