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Thursday, April 25, 2013

Nothing Short of Spectacular

Mark J. Perry, Carpe Diem, April 24, 2013

oil

The Department of Energy reported today that the US produced an average of 7.326 million barrels of oil per day (bpd) last week, reaching a new 21-year record high for domestic oil output (see chart above). The last time that US oil production exceeded 7.3 million bpd was the week ending April 17 in 1992, exactly 21 years ago. Last week’s oil output was above production for the same week in 2012 by almost 20% and above oil output two years ago by 31%.

Almost entirely due to the breakthrough drilling technologies of hydraulic fracturing and horizontal drilling that started accessing oceans of shale oil in North Dakota and Texas toward the end of 2008 (see arrow in chart), US oil output has increased by 46.5%, from about 5 million bpd in early 2009 to now more than 7.3 million bpd. The spectacular rise in US oil output over the last four years, and especially during the last two years, completely reversing several decades of declining US oil output in such a short period of time, is nothing short of phenomenal.

Welcome to “Saudi America.”

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