The year 2023 marked a record for U.S. oil production, with an average daily production of 12.93 million barrels per day, surpassing the previous record set in 2019. Furthermore, current data from the Energy Information Administration (EIA) indicates that average daily production in 2024 has increased to 13.12 million barrels per day, which is 7.1% higher than the production level from the previous year and 1.4% higher than last year’s record pace. This increase in production levels is a positive sign for the U.S. oil industry.
Similarly, U.S. natural gas production has also been on an upward trend. The EIA recently confirmed that 2023 marked a record for U.S. natural gas production, with production reaching 125 billion cubic feet per day. This was 4% higher than the previous record set in 2022. Although natural gas data is not reported as frequently as petroleum data, January’s natural gas production level was slightly behind last year’s record level. However, when comparing January 2024 to January 2023, this year’s production level was 1.1% higher than a year ago.
The price of West Texas Intermediate (WTI) crude is currently around $85 per barrel, which is approximately 7% higher than a year ago. This increase in crude oil prices is expected to support elevated U.S. oil production levels. Despite a slight decline in the number of rigs drilling for oil and gas in the U.S. (down nearly 20% from a year ago), the rig count has remained relatively stable from the previous quarter (down 1%). However, the decline in rig count is more significant for natural gas rigs (down 35%) compared to oil rigs (down 14%), indicating a shift in focus within the industry.
In conclusion, the U.S. oil and natural gas production levels have continued to rise, with both surpassing year-ago levels. While there has been a slight decline in the number of rigs drilling for oil and gas, elevated crude oil prices are expected to support continued production growth. The current trend in production levels highlights the resilience of the U.S. oil and gas industry, despite challenges such as fluctuations in prices and rig count numbers. The outlook for the industry seems positive, as production levels remain robust and prices remain favorable for continued growth.
