U.S. oil production sets new records, prices decline

by WorldTribune Staff, November 9, 2018

U.S. crude oil production hit a record 11.6 million barrels day as domestic prices sunk to their lowest levels since March, the U.S. Energy Department said on Nov. 7.

The U.S. fracking revolution is expected to drive production to 12.06 million barrels per day in 2019.

U.S. oil prices fell to $62 a barrel on Nov. 7. The last time the U.S. oil benchmark settled below $62 per barrel was March 15.

Commercial crude inventories rose by 5.8 million barrels last week and gasoline stocks jumped by 1.9 million barrels, the Energy Department said. Total petroleum inventories increased by 4.8 million barrels, offset partially by a dip in distillate fuel oil, which is used to make diesel fuel and heating oils.

Related: U.S. oil boom in 2018 seen having major economic impact, Jan. 16, 2018

Industry analysts say prices were pushed lower by the outputs of the top three producers – the U.S., Russia and Saudi Arabia – compounded by the Trump administration’s decision to grant sanctions waivers for several of the top buyers of Iranian oil, including China.

Meanwhile, U.S. crude oil production is expected to average 12.06 million barrels per day in 2019, passing the 12 million bpd milestone sooner than expected on surging domestic shale output, the U.S. Energy Information Administration (EIA) said on Nov. 6.

U.S. hydraulic fracturing, or fracking, service revenues were expected to grow by 20 percent this year, approaching a record of $29 billion set in 2014, according to a report early this year by oilfield research firm Spears & Associates.

Related: Strategic U.S. ties ‘critical’ for a Saudi kingdom shaken by fracking, Obama policies, April 25, 2017

Oklahoma City-based Continental Resources (CLR.N) reported its output from the oil-rich North Dakota shale field hit a record during the third quarter and would increase significantly through the end of the year as it completed more wells.

“Continental anticipates a strong wave of oil-weighted production growth as we approach the year end,” Chief Executive Officer Harold Hamm said, pointing to growth in North Dakota’s Bakken and drilling projects in Oklahoma.

For 2019, total U.S. production is expected to rise 1.16 million bpd from the prior year, more than EIA’s previous forecast for a 1.02-million bpd rise.

The agency’s monthly report said EIA expects production to surge above 12 million bpd in the second quarter of 2019, sooner than its previous estimate of the fourth quarter.

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