US Oil Output at Highest Level Since Before the Pandemic

In August, oil production in the United States rose to its highest level of output since the start of the COVID-19 pandemic, according to the U.S. Energy Information Administration (EIA).

Oil output in August 2022 was at nearly 12 million barrels per day (bpd), the latest data from the EIA shows. This is up 6.2 percent from the 11.3 million bpd output in August 2021. It is also the highest level since March 2020 when the COVID-19 pandemic began to spike. On a monthly basis, the August output was 0.9 percent higher than the previous month.

Among regions that produced more than 1 million bpd of oil, the Federal Offshore Gulf of Mexico area saw the highest output increase at 15.1 percent, followed closely by New Mexico with a 14.7 percent rise. Texas output rose by 4.8 percent while production in North Dakota declined by 3.5 percent.

U.S. oil production had peaked in November 2019 when output was at 13 million bpd. Since then, it has remained low due to the rising cost of labor and equipment, as well as rigs being shut down.

“You’ll see production tick higher, but I don’t think we’re going to go ripping higher to 13.1 million barrels,” Bob Yawger, director of energy futures at Mizuho in New York, told Reuters.

Despite America’s oil output having increased by 6.2 percent in the 12 months leading up to August 2022, gasoline prices have not fallen. Instead, retail prices rose from an average of $3.24 per gallon to $3.94 during this period, a rise of over 21 percent.

In its short-term energy outlook published on Oct. 12, the EIA projected retail gasoline would average $3.80 per gallon in the fourth quarter.

“Potential petroleum supply disruptions and slower-than-expected crude oil production growth could lead to higher oil prices, while the possibility of slower-than-forecast economic growth may contribute to lower prices,” the agency said.

Draining US Reserves

While U.S. oil production is rising, America’s Strategic Petroleum Reserve (SPR) has hit a record low under the Biden administration. As of Oct. 21, the SPR had fallen to 402 million barrels, which is only 20 days’ worth of supply for the United States and is the lowest level since 1984.

The SPR decline is due to President Joe Biden’s decision to release 180 million barrels of crude oil from the reserves in an attempt to stabilize energy prices. Republicans insist that the SPR drawdown is part of the Democratic Party’s political tactics ahead of the Nov. 8 midterm elections.

In an interview with The Epoch Times, Jay Young, founder and president of King Operating Corporation, criticized Biden for using the SPR like a “Ponzi scheme.”

“He drained a third of our strategic reserves because he wants to win an election. And that’s not what the strategic reserves are supposed to be used for,” he said. “They’re used for war and in times when we couldn’t get enough oil because of the war. That’s what the strategic reserve is used for.”

Allen Zhong contributed to this report.