US crude oil production set another all time high after an increase of 0.4mmb/d week over week in the two week period to November 2 to 11.6mmb/d, the highest level ever, according to the US Energy Information Administration (EIA).
“The US has become the largest crude oil producer in the world, outpacing Russia, according to the EIA data. Crude production in Russia reached 11.36mmb/d in October,” VTB Capital (VTBC) said in a note.
The US already overtook Russia to become the world’s biggest producer of oil in August, but Russia was expected to win back the lead in the coming months. However, the pace of growth of US production has accelerated. Russia has been the biggest single producer of oil in terms of barrels produced a day for several years, but the shale oil revolution in the US has seen production there skyrocket in recent years.
Russia’s October crude production result actually represents a new post-Soviet high, but currently US oil production is growing faster than Russia’s. In October, Russia crude production also reached a record high, at 11.36mmb/d, according to CDU TEK data, which was 2% below the latest US daily production estimate.
“This implies production growth of 0.44mmb/d (+4.0%) since May, when it started growing. To recap, in June OPEC+ members eased the production cut and Russia agreed to increase production 200kb/d from June levels,” VTBC reports.
Russia is setting new production records at a time when the average oil prices have risen from the $40s in 2017 to around $75 in the second quarter of this year, making Russia’s oil producers extremely profitable.
The next OPEC+ meeting is scheduled for 4 December.
A re-benchmarking that raised estimated production volumes 415kb/d accounts for the weekly growth in the US. Although the Alaska crude production estimate remained flat at 448kb/d, production in the lower 48 states increased 0.4mmb/d to 11.1mmb/d week over week. Therefore, according to the EIA data, not only has the US hit a record high crude production level, it has also become the world’s largest crude oil producer. Apart from that, the US NGL liquids production estimate increased to 4.4mmb/d (+17% y/y).