Crude oil production in the United States rebounded in January to an average of 12.462 million barrels per day, according to new data released Friday by the Energy Information Administration.
The 12.462 million bpd level was the highest production level the United States has seen since March 2020, shortly after the pandemic gripped the country. Crude oil production in the United States hit a pandemic low of 9.713 million bpd in May 2020.
By 2022, production had recovered somewhat, starting the year at 11.369 million bpd and ending the year at an average of 12.115 million bpd.
Earlier this month, Pioneer Natural Resources CEO Scott Sheffield pointed to U.S. refinery capacity and inventory problems as a reason the U.S. couldn’t ramp up production much more than it would. they were already producing. Sheffield predicted that US oil production would recover to pre-pandemic levels, but not grow as much as some had hoped.
“We can get back to 13 million barrels a day,” Sheffield said, but warned that growth would be “very slow,” likely taking years.
The EIA has forecast that US crude production will reach 12.4 million barrels per day this year.
“We don’t have refining capacity,” Sheffield said in defense of his position. “If we add more rigs, service costs will go up another 20-30%, which takes away free cash flow.”
While US crude oil production is rising slowly, global oil production fell 365,000 barrels a day in January, a seven-month low, according to JODI data. The lower oil production was mainly due to declines in Canada, Russia, Iraq and Bahrain. Although world production fell in January, world crude inventories rose to an 11-month high.
By Julianne Geiger for Oilprice.com
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