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US oil production rises to levels not seen since the beginning of the pandemic | News about the pandemic coronavirus

Higher prices are bolstering drillers’ confidence: Nymex benchmark oil has risen almost 35% in the past four months after OPEC and its alliance cut output to strike a balance between supply and demand.

The Permian Basin, America’s largest shale region, will produce crude oil at levels not seen since the pandemic began in the latest sign of a warming global economy.

Higher prices are bolstering the confidence of drillers. Nymex oil prices have risen nearly 35% in the past four months after OPEC and its coalition cut production to balance supply and demand.

Fossil fuels are also on the rise as Covid-19 vaccination progresses and Americans travel again, boosting gasoline consumption.

Production in the basin will hit 4,466 million bpd by May, the most in a year, and the number of rigs has hit a year-high, according to the latest data from the Energy Information Administration. By comparison, production peaked at more than 13 million barrels a day last year before a global pandemic crushed oil prices, forcing many drillers to file bankruptcy and close wells.

Artem Abramov, head of shale research for Rystad Energy. The company’s supply estimate for next month is slightly higher than the government’s forecast.

Before the February disruption, production in Permian is recovering, with drills finishing wells at 57% of their pre-pandemic rate, or about 250 a month. BNEF analyst Tai Liu says the patch will return to the path of increased production if producers can maintain the current momentum.

But growth across US shale segments will likely be controlled by manufacturers looking to curb spending in line with the promise of shareholders to increase dividends rather than supply.

“It will be very difficult for the US oil and gas industry to return to more than 13 million barrels a day. I don’t think that’s going to happen, ”Occidental Petroleum Group CEO Vicki Hollub said at a conference Tuesday. “It will take too much investment.”



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