Mark J. Perry @Mark_J_Perry
The Energy Information Administration released monthly oil production today for April and here are some of the highlights of that report:
1. Despite low oil prices that averaged $54.45 per barrel in April, US oil production topped 9.7 million barrels per day (bpd) in April and reached the highest level of domestic crude oil output in 44 years, going back to April 1971 (see chart above).
2. US monthly oil output has been higher than April’s daily average of 9.701 million barrels in only seven other months, all in late 1970 and early 1971, placing April of this year as the 8th highest month of oil production in US history.
3. The all-time peak monthly US oil production took place in November 1970, when output averaged 10.044 million barrels per day. April’s daily production average of slightly more than 9.7 million barrels is just 343,000 barrels (and 3.4%) below US peak oil production.
4. Note in the chart that there was a gradual, four-decade decline in US crude oil that took place between the early 1970s and about 2009, and during that time domestic production fell roughly in half, from 10 million bpd in 1971 to only about 5 million bpd in 2009. Thanks to the shale revolution, America’s oil production is now almost back to the 1970 peak level of 10 million bpd, and it only took a little more than six years for the bonanza of shale oil to almost completely reverse the 40-year decline!
Bottom Line: The dramatic rebound in America’s oil production since 2009 to a near 44-year high in April of this year has to be one of the most remarkable energy success stories in US history. Despite an anticipated potential temporary slowdown in US oil production due to falling crude prices, that slowdown hasn’t yet shown up in US production statistics from the EIA. And even if we get flat oil production over the summer, we can expect future production increases later this year as oil prices rebound to above $60 per barrel by late 2015 and top $62 in 2016, according to oil futures prices on the CME. There also ongoing advances in drilling and extraction technologies that are part of a new era known as Shale 2.0, which are sure to lead to greater efficiencies, increased recovery factors, and significantly lower costs. America’s emergence as the world’s largest producer of petroleum products and its new status as an energy superpower will continue for a long time.
