US oil production registers record volume increase

Crude oil production (including lease condensate) in the US was up in 2014 by 1.2 million barrels per day to 8.7 million bpd, the largest volume increase since records started being maintained in 1900.

This might result in a further reduction in the limited quantity of crude oil the US currently imported from Nigeria. The discovery of shale gas by the US had led to a major reduction in US oil imports from Nigeria.

Data from the US Energy Information Administration showed that on a percentage basis, output in 2014 was up by 16.2 per cent, the highest growth rate since 1940.

''Most of the increase during 2014 came from tight oil plays in North Dakota, Texas, and New Mexico where hydraulic fracturing and horizontal drilling were used to produce oil from shale formations,'' the EIA said.

''In percentage terms, the 2014 increase is the largest in more than six decades. Annual increases in crude oil production regularly surpassed 15 per cent in the first half of the 20th century, but those changes were relatively less in absolute terms because production levels were much lower than they are now.''

According to the EIA, crude oil production in the US had increased in each of the previous six years. The agency added that the trend followed a period from 1985 to 2008 in which crude oil production fell every year barring once.

Meanwhile, according to Rystad Energy, US oil production was moving towards an annual all-time high and if production did indeed top out, then supply levels too might peak and that, in turn, could lead to shrinking supplies.

According to the oil-and-gas consulting-services firm, an average 2015 output of 9.65 million barrels a day would be reached in five month overtaking the peak annual reading of 9.64 million barrels a day in 1970.

The 46-per cent drop in crude prices last year had been attributed to the huge scale of production from shale drilling and hydraulic fracturing, though reaching the so-called peak production might translate into a return to higher oil prices as supplies begin to fall.