The Department of Energy reported today that US oil production for the week ending July 19 reached 7.555 million barrels per day (bpd), which is the highest weekly output of crude oil in the US since the last week of December 1990, more than 23 years ago (see chart above). US oil production during the third week of July was higher than a year ago by 18.7%.
In just the last two years, oil production in “Saudi America” has increased by more than 2 million bpd (and by 37%), from 5.52 million bpd in July 2011 to 7.55 million bpd last week, and has completely reversed a multi-decade decline in US oil output (see chart). Amazingly, it took more than 20 years for US oil output to decline by 2 million bpd between 1989 and 2011, and then only 24 months to completely reverse that decline with a 2 million bpd increase in oil output since the summer of 2011.
Further, to put a two million bpd increase in US oil production into perspective, that would be like adding the entire oil output of the country of Brazil to the US oil supply. It would also be the equivalent of adding three new oil fields the size of the Bakken in North Dakota to America’s oil supply.
Bottom Line: A two million bpd increase in US oil output in only 24 months, almost exclusively from the dramatic increases in shale oil production made possible by revolutionary drilling technologies, is an important energy milestone and has to be one of the most remarkable success stories in the history of US energy production.
Welcome to America’s shale energy revolution, which continues to be one of the strongest reasons to be optimistic about the US economy.