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US crude oil production On track for a record this yearup 9% year-on-year through April, helping keep energy prices stable and undermining efforts by Saudi Arabia and other oil exporters to push them higher.
the The Energy Information Administration projected total U.S. production to reach 12.61 million bpd in 2023, surpassing the 2019 record of 12.32 million bpd and handily beating last year’s 11.89 million bpd.
OPEC and its allies have announced cuts this year amounting to about 6% of 2022 production, but Rystad Energy estimates that production in non-OPEC countries is making up for about two-thirds of the cuts, and crude prices are down 13% since the start of the year.
Half of the new crude comes from the United States, according to The Wall Street Journalwhere several companies including ConocoPhillips (COP), Devon Energy (DVN), and EOG Resources (New York Stock Exchange: EOG) and Pioneer Natural Resources (PXD) reported strong first-quarter production.
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The companies’ efforts to improve efficiency have provided more of the ability to continue to be profitable even when oil prices fall, and improvements since 2014 have lowered the cost of drilling and fracturing in U.S. shale by 36%, according to JP Morgan.
Increased efficiency means that EOG, for example, can earn as much from oil at $42 a barrel today as it could from $86 a barrel in 2014; Meanwhile, the Saudi government budget is said to require $81 per barrel of oil.
American producers continue to look for ways to improve efficiency; Darren Woods, CEO of ExxonMobil (XOM), said the industry is still recovering only about 10% of the oil it theoretically can from the Permian Basin.
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