US Becomes World’s Largest Oil Producer
American output hit a record 11.3 million bpd in August, as global oversupply concerns cause oil price to drop.
The United States became the world’s largest oil producer in August, the Energy Department has said, but the milestone spurred another sharp drop in oil prices as markets reacted skittishly to the prospect of growing crude supplies amid a global economic slowdown.
The Energy Department has reported that America’s crude output hit a record 11.3 million barrels a day in August, pushing past the Russian Ministry of Energy’s August estimate that Russia’s production was 11.2 million barrels a day. US production grew by more than 400,000 barrels, or nearly four percent, from July’s output of 10.9 million barrels a day, the Energy Department said.
That jump in production — even as pipeline shortages have slowed development in the booming Permian Basin in West Texas — helped drive crude to its lowest level since April, adding to slide that has lopped 17 percent from oil prices since they hit a recent peak above $76 a barrel in early October.
Analysts have long predicted that the United States would eventually surpass Russia in oil production, but it happened much sooner than many expected.
Monthly crude oil output reached record highs in several states, led by Texas, which pumped record 4.6 million barrels per day, and followed by North Dakota at 1.3 million barrels per day.
All this oil has helped to change market sentiment, which only a month ago was bracing for shortages as US sanctions on Iran were set to go into effect and production in Venezuela, riven by political and economic crises, continues to dwindle.
In addition to booming US output, Russia and Saudi Arabia, the No. 3 global producer, have ramped up production in anticipation of imminent US sanctions on Iran.
Traders also worry about a global economic slowdown, which would reduce energy consumption, as tariffs, looming trade wars and rising interest rates weigh on growth.