Global Oil Output Soars Thanks to U.S. Shale Development
The International Energy Agency’s (IEA) most recent Oil Market Report found global oil output continues to climb – thanks in no small part to increased shale development in the United States. Even with a brutal cold winter in the United States and growing tensions between Russia and the Ukraine, global oil production oil reached 92.81 million barrels per day, a 600,000 barrel per day increase from the month before.
As the Wall Street Journal highlighted:
“The dramatic increase in oil supply from the U.S. and Canada—coupled with a surprise surge in Iraqi output—helped stave off global demand pressures brought on by a cold U.S. winter and geopolitical concerns over rising tensions between Russia and Ukraine.”
Of course, we know that shale development is playing a key role in the United States’ growing output of oil, too. Production has increased rapidly in both Texas and North Dakota, which together accounted for 83 percent of U.S. production growth. By at least estimate, West Texas oil production alone could soon rival Kuwait.
This week, the Energy Information Administration announced oil production in the United States increased by a record 967,000 barrels per day in 2013, to a total of 7.5 million barrels per day. This marks the highest level of U.S. production since 1989.
At a recent Platts conference in Houston, Suzanne Minter, manager of crude and natural gas analysis with Bentek Energy, forecasted the Eagle Ford Shale in Texas is expected to continue to grow in 2014, and may even break the 1.5 million barrel per day mark in 2015. Currently, the Bakken Shale in North Dakota is hovering around the 900,000 barrels of oil per day mark, but is expected to reach the one million barrels per day mark in the near future.
This growth has helped the United States navigate through a tough winter that in the past would have contributed to a significant draw from global crude inventories. Fortunately for us all, that was not the case. Instead, non-OPEC supplies grew by 1.3 million barrels per a day in 2013, driven primarily by the United States and Canada. The IEA expects supplies to increase by a further 1.7 million barrels per day this year, marking the highest rate of growth since at least the early 1990s.
Thankfully, the continued increase of oil production in both the United States and Canada is providing a cushion to protect the United States, something we’ve discussed before. The bottom line is that U.S. shale development is helping to create stability in the global energy market, even though many of our elected leaders used to lecture us that American production could never impact global prices.