Prices Help Drive Increase of Midwest Oil Exploration

The EIA’s latest Short-term Energy Outlook is out and US crude oil output continues to soar, while natural gas prices are expected to climb back toward the $5 per million BTU level this year, before slightly pulling back in 2015.

EIA Administrator Adam Sieminski highlighted just how prolific US crude oil production has been in recent years:

“Texas and North Dakota now account for almost half of total U.S. oil production, as monthly oil output in Texas recently topped 3 million barrels per day for the first time since 1977 and North Dakota’s oil production hit a record 1 million barrels per day.” – Adam Sieminski

Put in context, total liquids production in Kuwait and Iraq individually was about 3.1 mmb/d in 2013, according to the 2014 BP Statistical Review of World Energy

Other highlights from the report include rapid natural gas inventory replacement, which has been putting downward pressure on prices over the past few weeks, but increasing consumption is expected to boost prices this year as compared with last year. However, those price increases are expected to reduce power sector consumption this year, after which lower prices and coal plant retirements could increase gas consumption in the power sector in 2015.

Read the full report here.