Crude oil production exceeded 12 million barrels per day in April

U.S. crude oil production and lease condensate rose to 12.2 million barrels per day in April, according to the U.S. Energy Information Administration (EIA). This was the first time that monthly U.S. crude oil production exceeded 12 million barrels per day after production levels rose to 11 million barrels per day in August.

Production in Texas and the Federal Offshore Gulf of Mexico increased to record levels of 4.97 million barrels per day and 1.98 million barrels per day, respectively, in April. Production in Oklahoma also rose to a record level of 617,000 barrels per day in April.

The rise in onshore production can be attributed to the development of low permeability (tight) formations using horizontal drilling and hydraulic fracturing. Crude oil production from tight formations rose to 7.4 million barrels per day, or 61% of total U.S. production, in April.

The Permian Basin in western Texas and eastern New Mexico has contributed to the rise in production. The basin has tight oil plays with multiple layers and is one of the lower-cost areas to develop. It accounts for about 63% of crude oil production in Texas and 96% of the production in New Mexico. Between January 2018 and April 2019, crude oil production in Texas rose 28%, or by 1.1 million barrels per day, and the production in New Mexico increased 64%, or by 345,000 barrels per day.

While the Permian Basin faces pipeline capacity constraints, production there rose by almost 100,000 barrels per day nearly every month in 2018, according to the EIA. The oil and gas industry has used pipelines efficiently and increased trucking and rail transportation in the region to allow crude oil production to continue to rise. Crude oil production in the Permian is expected to rise by 920,000 barrels per day to 4.4 million barrels per day in 2019, from 2018.

With regard to the Federal Offshore Gulf of Mexico, production is projected to rise to 1.9 million barrels per day in 2019 as the region becomes the second-largest contributor to growth in crude oil production from 2018 to 2019. The region added 14 new fields in 2018, and nine new fields are expected to start operating in 2019. These 23 fields are projected to contribute to more than 200,000 barrels per day of the expected 1.9 million barrels per day of production in 2019.