Monday, July 30, 2018

US crude oil production hit record level in June

US crude oil production hit record level in June

The USA has a massive legacy of produced oil reservoirs that respond wonderfully to fracking technology.  We do not have to look for this oil and the elephant in the room was always the Permian basement in which we have multiple productive zones often simply shut in as they were not attractive for water flushing which was the standard then.

Now we can get much of that oil by going directly into the formation and laying down a system of horizontal wells to drain the then fracked formation.  We get plenty of flush production and the whole formation will likely produce as much as initial primary production or even a lot more.

The result is that the USA has become oil sufficient for the short term which should be sufficient to carry us through to the full conversion into electrical vehicles.

The global market will not exit oil nearly as fast but oil demand will enter a steady decline that will last a couple of decades as legacy hardware is run down.  ..

US crude oil production hit record level in June

Crude oil and natural gas production hit a new record in June with the highest production ever in the U.S.

Production of crude topped 10.7 million barrels per day with production of natural gas hitting 4 million barrels per day, according to an analysis released by the American Petroleum Institute (API) Thursday.

API praised the major energy milestone as a sign of the country's "energy renaissance."

“U.S. oil production has supplied all of the growth in global oil demand so far this year and helped compensate for production losses in some OPEC nations," the group said. "With continued increases in drilling activity, the U.S. is poised for further production increases in natural gas and oil."

The analysis also found that petroleum demand with the U.S. is at its strongest since 2007.

The news comes as the United States aims to position itself as an international oil and gas provider. 

President Trump last week heavily promoted U.S. oil and natural gas exports during his NATO meetings in Brussels, strongly criticizing a planned Russia-Germany natural gas pipeline.

API warned though that recent tariffs placed on steel and iron imports could harm the oil and gas industry's success.

"For the energy renaissance to continue, the U.S. natural gas and oil industry critically needs policies that advance energy infrastructure around the country as well as the access of U.S. energy to global markets,” API said in its statement.

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