The U.S. is breaking oil-production records with fewer drilling rigs. Here’s how.
Category: News & PoliticsBy: kavika • one month ago • 15 comments
U.S. oil production has been holding at or near record highs since October, topping the previous peak from 2020, even though the number of active domestic oil drilling rigs is down by nearly 30% from four years ago.
Strength in oil prices and gains in investment and output efficiency have contributed to that climb, though analysts see a potential slowdown in output growth ahead.
U.S. oil production has “nearly tripled in the last 15 years, fueled by advances in drilling and fracking technology and investments in the early 2010s due to sustained higher oil prices and favorable government policies,” said David Carter, industrials senior analyst with assurance, tax and consulting firm RSM US.
U.S. strategy to “reduce dependence on foreign oil led to various federal and state-level tax breaks and eased regulations for oil exploration and production (E&P) companies.”
The surge in production has also led the U.S. to become a “major oil exporter, opening up new markets for companies to sell the increased production despite limited increases in U.S. demand,” he told MarketWatch.
U.S. crude-oil production stood at 13.2 million barrels per day as of the week ended Jan. 5, after reaching a record at 13.3 million bpd for the weeks ended Dec. 15 and Dec. 22, according to data from the Energy Information Administration.
That topped the previous record of 13.1 million bpd for the week ended March 13, 2020.
At that time, the number of active U.S. rigs drilling for oil stood at 683, according to data from Baker Hughes That number was at 499 as of the week ended Jan. 12, marking a roughly 27% drop.
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