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Whither US Oil Production?

By Paul Homewood | Not A Lot Of People Know That | March 13, 2022

This single chart from the US EIA explains just why oil prices are shooting up there:

chart(1)

https://www.eia.gov/petroleum/production/

The oil boom initiated by Trump saw crude oil output increase by a half between 2016 and 2019.

Output naturally collapsed in early 2020 as a result of the pandemic, which affected both supply and demand. But since then output has only slowly recovered, and is still 9% below 2019 levels.

It is worth pointing out that demand in 2021 was still not back to 2019 levels. Assuming it recovers this year, it is likely to put further upward pressure on prices, unless production increases as well.

To put the numbers into perspective, the US produces a sixth of the world’s crude oil. The increase in US output between 2016 and 2019 was 205 million tonnes, and represents 5% of global output.

Small changes in supply have a disproportionate effect on international oil prices, because demand is so inelastic. An extra 5% on world production would have a significant impact on prices.

March 15, 2022 - Posted by | Economics, Malthusian Ideology, Phony Scarcity | ,

3 Comments »

  1. American Crude oil production is falling, Russian Oil production is reduced by sanctions, and the Winner is…..WALL St ! They make money no matter what is happening to oil production, and the American people(and the rest of us) will just have to pay for it……..ain’t Capitalism Great?

    Like

    Comment by brianharryaustralia | March 15, 2022 | Reply

    • And we were once to believe that big oil requires stability. Imagine the opportunities for those with inside knowledge.

      Liked by 1 person

      Comment by aletho | March 15, 2022 | Reply

      • Absolutely. By the time “News” arrives to the people, the “BIG GUYS” have already sealed a deal……

        Like

        Comment by brianharryaustralia | March 15, 2022 | Reply


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