U.S. Crude Oil Production Saw The Biggest Drop On Record In 2020
- Slashed drilling activity and low oil prices led to the largest decline in annual average crude oil production in the United States in 2020
- U.S. crude oil production averaged 11.3 million barrels per day (bpd) last year, the EIA has estimated
Slashed drilling activity and low oil prices led to the largest decline in annual average crude oil production in the United States in 2020, when output slumped by 8 percent from a record high in 2019, the Energy Information Administration (EIA) said on Wednesday.
U.S. crude oil production averaged 11.3 million barrels per day (bpd) last year, the EIA has estimated. This was down by 935,000 bpd, or by 8 percent, compared to the record annual average of 12.2 million bpd in 2019.
Last year’s flop in U.S. oil production was the largest annual decline in EIA records.
Following the crash in oil prices in March 2020 due to the pandemic, U.S. operators curtailed production and brought fewer wells online. By May 2020, American crude oil production had slumped to a monthly average 10 million bpd from a peak of 12.8 million bpd in January 2020.
Texas, as usual, accounted for the largest share of U.S. crude oil production—at 43 percent last year. Output in Texas fell less than the national average, by 205,000 bpd, or 4 percent, to average 4.87 million bpd in 2020, down from the record high of 5.07 million bpd set in 2019.
But New Mexico, home to part of the Permian, saw its crude oil production rise and was the only major oil-producing region to see growth last year. New Mexico’s annual average crude oil production jumped by 15 percent, or by 133,000 bpd, to a record high of 1.04 million bpd. At the end of this year, drilling activity is picking up in the U.S. shale patch, although most operators continue to keep capital discipline and are not headed to “drilling themselves to oblivion,” as they used to do before last year’s price collapse.
This year, U.S. crude oil production is set to average 11.1 million bpd, and rise to 11.8 million bpd in 2022, and to an average of 12.1 million bpd in the fourth quarter of 2022, the EIA’s latest Short-Term Energy Outlook (STEO) showed earlier this month.