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McGeeisme In January 2020, just before the Covid-19 pandemic began to sweep across the U.S., domestic oil production was 12.8 million barrels per day (BPD). Production remained at that level for a couple of months despite the double-whammy of a price war between Saudi Arabia and Russia, and growing demand destruction as a result of the Covid-19 pandemic.
But the situation was untenable. The price of oil eventually fell to zero and then kept going. That forced some producers into bankruptcy, resulting in the largest short-term oil production drop in U.S. history.
Monthly Oil Production
Monthly U.S. Oil Production Since 2000 ROBERT RAPIER
Production declined all the way to 9.7 million BPD in May 2020 (which was the month after oil prices went negative), but has since bounced back to 11.3 million BPD.
Meanwhile, U.S. oil demand has jumped back above 21.8 million BPD, which is where it was prior to the Covid-induced plunge. This loss of supply and recovery of demand is the biggest reason we have $80/bbl oil today when it was only $60/bbl just before the pandemic.
The loss of supply has caused the U.S. to lose its briefly-held status as a net exporter of petroleum and petroleum products. That number had trended down from a high of 13 million BPD of imports in 2005 all the way to over a million BPD of exports in 2020. Now we have returned to net importer status, most recently importing a net average of 1.3 million BPD over the past four weeks.
Forbes Oct 22, 2021
