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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 of 2020, shortly after the pandemic took hold in the country. Production of crude oil in the United States reached a pandemic low of 9.713 million bpd in May of 2020.
By 2022, production had somewhat recovered, 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 the United States’ refinery capacity and inventory issues as a reason why the United States wouldn’t be able to increase production much higher than it was already producing. Sheffield predicted that U.S. oil production would rebound to pre-pandemic levels, but wouldn’t grow as much as some would hope.
“We may get back to 13 million barrels a day,” Sheffield said, but cautioning that the growth would be at a “very slow pace”, likely taking years.
The EIA has forecasted that U.S. crude oil 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%, it takes away from free cashflow.”
While U.S. crude oil production is rising slowly, global oil production fell by 365,000 barrels per day in January—a seven-month low—according to JODI data. The lowered oil production was brought on mainly by decreases in Canada, Russia, Iraq, and Bahrain. While global production fell in January, global crude inventories grew to an 11-month high.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.