U.S. Markets open in 4 hrs 32 mins

U.S. Is Now Largest Oil… And Gas Producer In The World

Tsvetana Paraskova

Petroleum and natural gas production in the United States jumped by 16 percent and 12 percent, respectively, in 2018, setting new production records and placing the United States as the world’s single largest producer of oil and natural gas, the Energy Information Administration (EIA) said on Tuesday.

The U.S. had already surpassed Russia as the world’s biggest natural gas producer back in 2011.

Last year, the United States beat Saudi Arabia to become the single largest petroleum producer, the EIA said, noting that “Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.”

While Saudi Arabia is bound by the OPEC+ production cut pact and has been curbing its oil production, eager to prop up prices, U.S. shale production has surged over the past two years, also supported by the higher oil prices that the OPEC deal has brought.

Crude oil production in the U.S. jumped by 17 percent in 2018, setting a new production record of almost 11.0 million bpd, with the Permian contributing to most of the production growth, the EIA said.  

This year, however, the U.S. shale production has been growing at a slower pace amid lower oil prices as companies scale back drilling plans and budgets as investors clamor for more returns.

U.S. shale producers need to slow down this production growth and focus more on capital discipline in what is an oversupplied market, Continental Resources’ Harold Hamm said last week.

In its latest Short-Term Energy Outlook (STEO) earlier this month, the EIA sees U.S. shale’s monthly production growth slowing at least until 2020, averaging 50,000 bpd a month from the fourth quarter of 2019 through the end of 2020, down from average growth of 110,000 bpd a month from August 2018 through July 2019. Despite the growth slowdown, the EIA still expects U.S. crude oil production to set record production levels in 2019 and 2020, at 12.3 million bpd and 13.3 million bpd, respectively.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Read this article on OilPrice.com