U.S. oil production may climb to a record level before this year is over, according to energy-data firm Rystad Energy.
Domestic production is likely to grow so fast that it could reach 10 million barrels a day before Dec. 31, Rystad Energy said in a Wednesday report, as growth from shale drilling and Gulf of Mexico deep-water fields offset declines from other U.S. conventional oil fields.
That output level would match the historic record of 10 million barrels a day that was seen in November of 1970, when oil prices were trading below $3 a barrel, it said.
On Wednesday, July West Texas Intermediate crude CLN7, +0.10% settled at $48.32 a barrel on the New York Mercantile Exchange.
According to data from the U.S. Energy Information Administration, U.S. production peaked, monthly, more recently in April 2015 at about 9.63 million barrels a day. It reached record monthly output of 10.044 million barrels a day in November 1970, according to data going back to 1920.
“Based on proprietary and detailed well level data, Rystad Energy sees current U.S. production bouncing back twice as fast as it dropped, reaching 9.4 million barrels on May 31st,” the data provider said in a news release for its subscription-based monthly oil report. “This very steep growth comes with U.S. oil prices locked below the price most analysts estimated as a minimum to grow U.S. oil production.”
“U.S. oil production has grown faster at [$50] than any analysts in the market predicted,” Bjørnar Tonhaugen, vice president of Oil Markets at Rystad Energy, said in a statement.
“As these numbers are getting confirmed, the initial optimism about OPEC’s temporary [production] cuts, may turn to increasing skepticism about OPEC’s choice of policy once the current output deal expires next year,” said Tonhaugen.