Crude Production Stays Above 9 Million Barrels a DayMoming Zhou
U.S. crude-oil production stayed above 9 million barrels a day for a third week even as prices plunged to a four-year low.
Output rose 0.8 percent to 9.08 million barrels a day last week, the most since at least January 1983, when the weekly data series from the Energy Information Administration began. The EIA has monthly data going back to 1920 and that shows production at highest level since February 1986. Members of the Organization of Petroleum Exporting Countries are meeting tomorrow to discuss whether to cut their production.
“Production has continued to rise because of the improved technology to extract oil from shale formations,” said James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas. “However, it’s going to slow if prices stay this low, maybe starting from the second quarter of next year.”
The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S., including the Bakken in North Dakota and the Eagle Ford in Texas.
U.S. crude production will rise to 8.57 million barrels a day this year, up from 7.46 million last year, according to EIA forecasts. Output is projected to climb to 9.42 million barrels a day in 2015, the most since 1972. The agency reduced its 2015 production outlook in its monthly report on Nov. 12.
West Texas Intermediate crude dropped 3 cents to $74.06 a barrel today on the New York Mercantile Exchange after ending at $74.09 yesterday, the lowest settlement since September 2010. Prices have dropped 31 percent from this year’s high in June.
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