U.S, Crude Production Hits a Record, But Trade Worries Loom

The Texas oil industry continues to set production records, but there are concerns about a key facet of the industry that could result in production pullbacks, News Radio 1200 WOAI reprots.

Dean Foreman, chief economist with the American Petroleum Institute, says U.S. crude oil production surpassed 12 million barrels a day in January, further extending the country's widening lead over Saudi Arabia and Russia has the number one oil producer in the world.

"Crude oil production and natural gas liquids production in the United States is at brand new highs, we are setting records there," Foreman told News Radio 1200 WOAI. "And American refineries are taking that oil and turning them into gasoline and other materials at a record pace for the month of January."

The API and the Energy Information Adminisration, the branch of the Energy Department which predicts trends, both say the U.S. will achieve total energy independence by next year, an achievement which would have seemed impossible back in the gas line days of the 1970s.

In fact, U.S. production has set new recordsm surpassing production levels not seen since the late 1960s.

By comparison, U.S. domestic oil production in 2008 was just a little over four million barrels per day.

But Foreman says U.S. oil exports, which have become a key part of the country's oil economy, are seeing disturbing declines.

"We've seen our refined product experts, that is gasoline, diesel, and other fuels, drop by more than a half million barrels per day just in the last two months, and that seems to be indicative of global economic trends," he said.

Ever since President Obama legalized the export of U.S. crude oil in 2015, exports have played a key role in U.S. oil production. Foreman saysany producers of the type of 'light, sweet crude' which is produced by U.S. shale fields, prefer to export the crude because many U.S. refineries are set up to process the heavier, sour crudes produced in countries like Venezuela.

Exports of refined products are also on the upswing as U.S. production rises, and many Texas producers are used to shipping their oil and their refined products to ports like Corpus Christi where they are exported.

But Foreman says growing trade battles have convincted major U.S. customers like China to turn elswhere for their crude and refined products imports, and that could convince Texas producers to pull back on production, or to hold off on drilling new wells.

"It is a wait and see,' he said. "We have to see how this plays out , and if a trade deal is reached, we are optimistic that U.S. oil and gas will again be an enabler for growth of the global economy."


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