Permian Oil Production Is Set To Hit A Record High

• Permian Basin oil production is projected to hit a record high next month, with the EIA forecasting October production of 5.413 million bpd
• It is notable that all plays in the Lower 48 are expected to increase or maintain production in October.
• While total U.S. oil production remains below the pre-pandemic record high, the EIA believes production could hit new highs next year.

Crude oil production in the Permian Basin is set to hit a record high next month, adding 66,000 bpd from September to 5.413 million bpd, the Energy Information Administration said in its latest Drilling Productivity Report.

Total oil production in the Lower 48 is seen adding 132,000 bpd from this month to next, to reach a total of 9.115 million bpd, the EIA also noted in its report. All plays will see additions in output in October and none will see a decline, with only Haynesville’s output rate remaining unchanged.

The latest factual data from the EIA shows U.S. total oil production rose to the highest since April 2020 in June, to 11.8 million bpd. That’s still below the record-high rate of production U.S. drillers had reached right before the pandemic struck but a significant recovery from the pandemic collapse in production.

Oil companies remain wary of growth at any cost, not least because of continuing constraints such as equipment and worker shortages and higher costs due to inflation. Yet the data suggests output is inching up in response to robust demand, not only in the U.S. but abroad as well.

Yet not everyone is so optimistic: Pioneer Natural Resources’ Scott Sheffield said last week that U.S. oil production growth next year is likely to disappoint by being lower than this year’s.

The chief executive of Pioneer has forecast that U.S. oil production will add half a million barrels per day this year but in 2023 the production gains may be lower than this, Reuters reported last week, because of the above-mentioned constraints. The EIA forecasts production growth of 800,000 bpd for 2023.

According to the authority’s forecast, U.S. crude oil production could hit a record high of 12.6 million bpd next year, beating its pre-pandemic record of 12.3 million bpd, set in 2019.

By Irina Slav for Oilprice.com

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