U.S. Crude Oil Production In 2013 Reaches Highest Level Since 1989

Total U.S. crude oil production averaged 7.5 million bbl/d in 2013, 967,000 barrels per day (bbl/d) higher than 2012 and the highest level of U.S. production since 1989. In December 2013, U.S. crude oil production reached 7.9 million barrels per day (bbl/d), according to EIA's recently released December 2013 Petroleum Supply Monthly, an increase of 785,000 bbl/d (11%) compared with December 2012.

The 15% increase in U.S. production from 2012 to 2013 was the largest annual percentage increase since 1940. The increase in domestic production supported high refinery utilization rates, reduced U.S. imports of crude oil, and changed domestic and global crude oil and petroleum product trade flows.

U.S. crude oil production gains were geographically concentrated in Texas and North Dakota, which together accounted for 83% of U.S. production growth. Production in the Eagle Ford formation in South Texas reached an estimated 1.22 million bbl/d in December 2013. Production from the Bakken formation in North Dakota and Montana averaged 0.9 million bbl/d in 2013 and reached 1 million bbl/d in November 2013. Other states with significant production increases included Oklahoma, New Mexico, and Colorado.

Seven states and the Gulf of Mexico had lower crude oil production in 2013 than in 2012. The Gulf of Mexico and Alaska accounted for most of the decline, each falling by 2%.

Increased domestic production provided U.S. refineries with additional volumes of cost-advantaged crude oil, supporting high refinery runs. Monthly U.S. refinery utilization averaged 88% in 2013 and exceeded 90% for six months of the year. Gross inputs to atmospheric crude oil distillation (CDU) units increased 355,000 bbl/d (2%) over 2012 levels.

As domestic production rose during 2013, crude oil imports were displaced and net imports fell to 7.6 million bbl/d – the lowest level since 1996. U.S. net imports of crude oil declined by 861,000 bbl/d (10%) in 2013 and at year-end were 30% below the June 2005 peak of 10.7 million bbl/d. The share of U.S. crude oil demand supplied by domestic production rose sharply in 2013, averaging 49% compared with 43% in 2012. U.S. crude oil production was 6% higher than net imports in the fourth quarter of 2013.

Looking ahead, EIA's March Short-Term Energy Outlook (STEO) projects U.S. production to average 8.4 million bbl/d in 2014, an increase of 0.9 million bbl/d. In 2015, STEO projects U.S. oil production to rise an additional 0.8 million bbl/d to average 9.2 million bbl/d, close to the 1970 historical peak U.S. annual production of 9.6 million bbl/d. STEO projects crude oil production growth to be concentrated primarily in the Bakken, Eagle Ford, and Permian formations through 2015. STEO also projects Gulf of Mexico production to rise in the near term, increasing 140,000 bbl/d in 2014 and an additional 210,000 bbl/d the following year to average 1.6 million bbl/d in 2015. Projected Gulf of Mexico production increases result from 8 projects expected to come online in 2014 and an additional 10 in 2015.

Source : EIA