Light oil production continues to grow in the United States, rising 7% over the last four years to 57% of the total 1.24 million b/d of crude produced in 2019, according to the Energy Information Administration (EIA).
U.S. light oil production grew to 6.7 million b/d last year, up from 5.8 million b/d in 2018, as refinery inputs continued to become lighter for petroleum product processes, according to EIA. The agency said the average American Petroleum Institute (API) gravity, a measure of specific density in crude oil or condensates, increased from a low of 30.2 degrees in 2004 to a record-high average of 32.9 degrees in 2019.
“Since 2009, U.S. imports of crude oil have decreased 23%. During the same time period, domestic production grew 138% and, as a result, provided a greater share of refinery inputs,” EIA said.
Heavier crude oil tends to be priced lower than lighter oil, providing an incentive for refiners to run the heavy stock if they have the capability to do so.
The fastest growing crude was relatively light, with an API gravity of 40-50 degrees, according to EIA. This was found in 56% of the output produced in Texas, where production reached 2.9 million b/d in 2019, driven by increasing production in the tight oil plays of the Permian Basin and Eagle Ford Shale.
The crude produced in North Dakota’s Bakken Shale also tends to be relatively light, according to EIA, while the production in California and the Gulf of Mexico tends to be heavier.
At the same time, the EIA said 6.5 million b/d (96%) of the imported oil last year was heavier, with an API gravity of 40 degrees or lower. Only 5.1 million b/d (43%) of domestically produced crude was considered to be heavy.
Overall, imports of relatively heavy oil decreased by 971,000 b/d, or 13%, in 2019, and domestic production of relatively light oil increased by nearly 900,000 b/d, or 16%, EIA said.
More Growth Ahead
In the latest Short-Term Energy Outlook released Wednesday, EIA said that U.S. oil production has risen in recent months after declining from 12.7 million b/d in the first quarter to a recent low of 10.0 million b/d in May. The agency estimated U.S. production increased to 10.8 million b/d in August.
Production has risen as tight oil operators have brought wells back online. The increase in total output occurred despite shut-in production in the Gulf of Mexico as a result of Hurricane Laura. EIA expects production to rise to 11.2 million b/d in September as output in the Gulf of Mexico returns.
After September, EIA expects U.S. production to decline slightly, averaging just under 11.0 million b/d during the first half of 2021 on expectations that drilling activity would not generate enough production to offset declines from existing wells. Drilling activity is expected to rise later in 2021, contributing to U.S. production reaching an average of 11.3 million b/d in 4Q2021.
On an annual average basis, EIA expects U.S. oil production to fall to 11.4 million b/d in 2020 and 11.1 million b/d in 2021, from an average of 12.2 million b/d in 2019.
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