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Strategic Petroleum Reserves Grow as USA Adds Oil: How Long Will U.S. Oil and Gas Last?
06/18/2024![Strategic-Petroleum-Reserves-Grow-as-USA-Adds-Oil-How-Long-Will-U-S-Oil-and-Gas-Last](https://images2.rextag.com/public/blog/286_Blog_Strategic Petroleum Reserves Grow as USA Adds Oil How Long Will U.S. Oil and Gas Last.jpg)
U.S. Oil Production Levels Off: What’s Next?
U.S. oil and gas output is leveling off after a period of intense activity. As of March 2024, crude oil production hovered around 13.2 million barrels per day, according to the U.S. Energy Information Administration. This marked a slight increase of less than half a million barrels per day from the previous year, indicating a slowdown from the rapid growth seen in the latter half of 2023.
The slowdown in oil production aligns with historical patterns, typically following a period of high prices which peaked in 2022. By early 2024, production began to stabilize, influenced also by weather disruptions at the end of 2023 that initially masked the signs of this leveling trend.
The natural gas sector has seen an even sharper halt in production growth. From March 2023 to March 2024, dry gas production remained almost unchanged—around 102.6 billion cubic feet per day—showing signs of peaking towards the end of 2023. With gas prices dropping sharply since mid-2022, the number of rigs drilling for gas decreased significantly. By May 2024, only about 101 rigs were active, down from 162 in September 2022.
This decline in active rigs is expected to keep oil production relatively flat through mid-2025 unless there’s an unexpected price rebound. This stabilization in oil drilling is evident from the rig count, which dropped from a high of 623 in December 2022 to just 497 by May 2024. If oil prices remain steady, no significant increase in production levels is anticipated.
Looking forward, the industry expects a balanced market, aided by strong demand for gas in power generation this summer, a potentially colder winter, and increased LNG exports. These factors are likely to deplete surplus inventories by the end of the 2024/2025 winter season.
How Long Will U.S. Oil and Gas Last?
The U.S. is known for its highly efficient and clean energy production, making it counterproductive and contradictory to depend more on energy from foreign countries with adversarial relations.
Recent updates from the U.S. Energy Information Administration (EIA) reveal that as of the end of 2022, U.S. crude oil reserves have grown by 9% to 48.3 billion barrels. Meanwhile, natural gas reserves have also seen a significant increase, rising 10% from the previous year to a new record of 691.0 trillion cubic feet.
The United States sits atop a staggering reserve of oil and natural gas, according to a recent report from the Institute for Energy Research (IER):
Oil Reserves: The U.S. holds about 1.66 trillion barrels of technically recoverable oil.
- Current Usage: Enough to last 227 years at the current rate of consumption.
- Gasoline Production: This could fuel the transportation sector for 539 years if solely used for gasoline based on 2023 usage levels.
- Comparison: This is a 15% increase from the 2011 IER estimate and over 5.6 times the proved reserves of Saudi Arabia.
Natural Gas Reserves: The U.S. has approximately 4.03 quadrillion cubic feet of technically recoverable natural gas.
- Supply Longevity: At the current rate, there's enough natural gas for the next 130 years.
- Potential Increase: If just half of the in-place natural gas resources become recoverable, the U.S. could have over 1,000 years' supply at 2022 consumption rates.
U.S. Strategic Petroleum Reserve
Recently the U.S. government announced plans to buy 6 million barrels of crude oil for the Strategic Petroleum Reserve (SPR) as part of efforts to replenish it after last year's extensive drawdown. In 2022, President Joe Biden's administration released a historic 180 million barrels to stabilize oil prices. Since then, approximately 14 million barrels have been bought for restocking, with an additional 4 million barrels scheduled to return to the SPR by February, following their temporary loan to various oil companies.
This recent purchase includes 1.2 million barrels from Sunoco Partners Marketing & Terminals LP and about 900,000 barrels each from Macquarie Commodities Trading US LLC and Phillips 66. Additionally, the Energy Department has managed to cancel 140 million barrels of oil previously mandated by Congress to be sold from the SPR from this year through late 2026. This action is part of ongoing efforts to manage the nation's emergency oil reserves effectively.
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2023 Closes with a Wave of Deals: Canada to Permian Basin
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/217Blog_Athabasca Oil and Cenovus Energy are joining to form Duvernay Energy.png)
-Crescent Point Energy finalized its $1.9 billion purchase of Hammerhead Energy to expand operations in Alberta's Montney Shale -Two Canadian companies merged to increase their presence in Alberta's Kaybob Duvernay area -Ring Energy completed acquisition in the Permian Basin
Significant Rise in U.S. Crude Oil and Gasoline Inventory Levels
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/H248_Blog_Significant Rise in U.S. Crude Oil and Gasoline Inventory Levels.png)
This week, the American Petroleum Institute (API) reported that U.S. crude oil stocks increased by 7.168 million barrels, ending February 16. This rise exceeded analysts' expectations of a 4.298 million barrel increase. Last week, the API noted an 8.52 million barrel jump in crude inventories.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/288_Blog_U.S. Refineries Lake Charles, Lemont, Wood River, Rodeo San Francisco, Los Angeles and TOP Operators.jpg)
U.S. crude oil refining capacity experienced a notable boost this year, climbing 1.5% to reach 18.38 million barrels per day. The recent expansion includes Exxon Mobil's Beaumont, Texas, refinery, which underwent a significant increase of approximately 250,000 barrels per day. As of the start of 2023, there were 124 active oil refineries nationwide. After a two-year downturn due to decreased demand during the COVID-19 pandemic, U.S. refining capacity saw a significant rebound. In 2023 alone, capacity surged by over 100,000 barrels per day to reach 18.1 million, although this still trails the peak of 18.98 million barrels per day seen in 2019.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/289_BLOG _Texas Oil Goes Global The International Face of Eagle Ford.jpg)
Eagle Ford Shale is a hotspot for international investment. While U.S. companies continue to focus heavily on the Permian Basin, the Eagle Ford Shale in South Texas has become a magnet for international energy firms.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/286_Blog_Strategic Petroleum Reserves Grow as USA Adds Oil How Long Will U.S. Oil and Gas Last.jpg)
U.S. oil and gas output is leveling off after a period of intense activity. As of March 2024, crude oil production hovered around 13.2 million barrels per day, according to the U.S. Energy Information Administration. This marked a slight increase of less than half a million barrels per day from the previous year, indicating a slowdown from the rapid growth seen in the latter half of 2023.