The US is pumping more oil than ever, and it’s complicating things for other crude-exporting countries
The US is pumping a record amount of oil. But that may not be welcome news to other crude-producing nations.
Domestic output reached 13.4 million barrels a day in August, eclipsing all previous monthly records. According to US Energy Information Administration data, firms in Texas and New Mexico led the surge.
That level of production puts the US at odds with the plans of other oil-producing nations. OPEC+, an alliance led by Saudi Arabia and Russia, has said it plans to begin in December a sequence of monthly output increases. But given the decline in the price of crude oil — down 20% from an April high — continued record production from the US, and weakening demand, oil traders believe OPEC+ will delay its program for a second time.
It’s the culmination of a multi-year period that saw OPEC+ members cut production to support higher market prices, only to be undercut by expanding production from non-OPEC exporters.
Looking into 2025, analysts speculate that global demand will continue sliding, especially given China’s decelerating oil consumption. That’s one reason the global oil surplus could swell to 1.2 million barrels per day next year, according to JPMorgan. Otherwise, expanding outflows from the US, Brazil, Guyana and Canada will also play a part.
“OPEC+ increasingly appears to be searching for El Dorado: an oil market where demand is strong enough that it can increase output and prices stay above $80 per barrel,” wrote Bill Weatherburn, senior climate and commodities economist at Capital Economics. “We suspect that this won’t be found in 2025 either as China’s demand growth will remain soft and more oil supply from non-OPEC+ producers will enter the market.”
