Column: US Oil and Gas Output Still Rising in Response to High Prices Last Year

US oil and gas output continued to rise strongly in March – the delayed impact of very high prices that prevailed until the third quarter of 2022.

Oil output increased by 171,000 barrels per day (b/d) in March compared with February, according to the U.S. Energy Information Administration (“Petroleum supply monthly”, EIA, May 31).

The gains were led by the Lower 48 states (+137,000 b/d) and Gulf of Mexico (+45,000 b/d), which more than offset lower production from Alaska (-11,000 b/d).

Output rose by almost 10% in the first three months of 2023, compared with the same period a year earlier, and was the second-highest for the time of year after 2020.

On the gas side, dry production hit record 3,171 billion cubic feet in March and was more than 7% higher than in the same month a year earlier (“Natural gas monthly”, EIA, May 31).

Gas output climbed to a record 9,180 billion cubic feet in the first quarter and was also 7% higher than a year before.

Shale production is often characterised as “short cycle” because wells have a relatively rapid decline rate and new ones must be drilled constantly to replace the dwindling output from older ones.

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Source: Reuters

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