As 2024 Approaches U.S. Leads Global Crude Oil Production

The U.S. is heading into the New Year as the world’s largest oil producer, according to the latest industry research.In line with market expectations and recent observations by the U.S. Energy Information Administration, market research and data provider S&P Global Commodity Insights noted on Tuesday (December 19, 2023) that the country is in fact currently producing more oil than any other nation in history.

U.S. total liquids production for Q4 2023 stands at 21.4 million barrels per day (bpd), of which 13.3 million bpd is crude and condensate with the balance composed of natural gas liquids and biofuels.Both totals are global records, according to Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy and Mobility at S&P Global Commodity Insights.”Not only is the U.S. producing more oil than any country in history, but the amount of oil (crude oil, refined products and natural gas liquids) that it is exporting is near the total production of Saudi Arabia or Russia.

“When you look back at 2008 – when U.S. production was at a 62-year low, and exports were zero – it is a remarkable turnaround,” Burkhard added.Furthermore, the production uptick stateside is also part of a wider trend of rising non-OPEC production with Brazil and Canada set to produce more than at any time in their histories.

Brazil’s 2023 production is coming in at 3.388 million bpd of crude and condensate and 4.195 million bpd in total liquids, while Canada’s is at 4.844 million bpd in crude and condensate and 5.674 million bpd in total liquids. All three nations are on track to set new national highs again in 2024 going by S&P Global Commodity Insights’ projections.So strong is the current rate of non-OPEC+ supply growth that it will more than meet growing global demand in 2024, as liquids supply growth outside of OPEC+ is expected to grow 2.7 million bpd in 2024, well above total demand growth of 1.6 million bpd.

The growth in non-OPEC+ production coupled with OPEC+ supply restraint sets the 2024 “playing field” for oil prices between $75-$100 per barrel for Dated Brent.”Oil markets are heading into 2024 with a new equilibrium. OPEC+ supply management keeps prices from falling below a certain floor, at least for any significant amount of time. At the same time, prices remain high enough to support oil production growth outside of OPEC+, which in turn deters prices from surging too high,” Burkhard added.

Of course, the new oil price playing field is can change at any time. Major market and geopolitical developments coupled with what OPEC+ – a group of Russia-led crude oil producers and the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) – does in 2024 could always impact things.”If prices stay high enough to sustain strong supply gains outside of OPEC+, then pressure rises on the organization to cut more. Most of the time action is taken to support prices, but history shows that sometimes supply restraint and lost market share becomes an increasing burden,” Burkhard concluded.