For the second week in a row, crude oil output surpassed 7 million barrels per day (bpd) during the second week of January in “Saudi America,” and increased to the highest output level (7.04 million bpd) since the third week of January 1993, just about exactly 20 years ago. Compared to the same week last year, US oil production increased by 23% and by 1.32 million bpd for the week ending January 11 of this year. The increases in US crude oil output are accelerating, and the 23% annual increase through the second week of January this year was the highest yearly gain in domestic oil production in the last 20 years, with the exception of some larger increases in 2006 and 2009 following the significant hurricane-related declines in 2005 and 2008. In May of last year, the annual increases in US oil output went from single-digit percent increases to consistent double-digit increases through the rest of 2012, increasing to gains of more than 19% in the three weeks prior to the most recent week of a 23% annual gain. At the current pace of increase, US oil output could reach 7.5 million bpd by May of this year, which would bring domestic production to the highest level since January 1990.
Bottom Line: “Carpe oleum” (seize the oil)