According to data released by the U.S. Energy Information Administration (EIA), U.S. oil production surged to a record 13.46 million barrels per day (bpd) in October, marking an increase of 260,000 bpd month-over-month as demand reached its highest levels since the pandemic.
Key Highlights:
Production Growth:
U.S. oil output has increased significantly this year due to enhanced drilling efficiency, despite concerns of oversupply affecting prices.
Year-over-year, production rose by 2.3% in October, even as West Texas Intermediate (WTI) crude futures averaged 16% lower compared to the previous year.
Demand Surge:
Total U.S. oil demand rose by approximately 700,000 bpd from September to reach 21.01 million bpd in October, the highest level since August 2019.
Demand for distillate fuels, including diesel and heating oil, reached 4.06 million bpd, the highest in a year.
Regional Production Insights:
Texas, the top oil-producing state, recorded an output of 5.86 million bpd, an increase of 55,000 bpd from September.
The U.S. Gulf of Mexico saw a rebound in oil output to 1.76 million bpd, up 191,000 bpd month-over-month, following hurricane-related production disruptions in September.
In contrast, North Dakota’s oil output fell by 3.6% to 1.16 million bpd due to wildfires affecting the region.
Future Projections:
Analysts indicate that while production growth is moderating, with projections of 300,000 to 400,000 bpd growth in 2024 compared to nearly 1 million bpd in 2023, infrastructure constraints may continue to limit output.
Giovanni Staunovo, an analyst at UBS, noted that the strong demand in October was unexpected and may lead to upward revisions in 2024 demand forecasts by energy agencies.
Natural Gas Production:
Natural gas production from the U.S. Lower-48 states averaged 115.87 billion cubic feet per day (bcfd), an increase of 1.2 bcfd from September, with Texas output reaching a record 36.49 bcfd.