The US will be an oil production powerhouse through at least 2026, Goldman Sachs says
By Jennifer Sor,
2024-07-25
US oil production will be "robust" for at least the next 18 months, Goldman Sachs said.
That's because drilling efficiency is improving, and oil prices are poised to stay high.
Still, the bank is calling for a slight slowdown as rigs begin to age in the Permian Basin region.
America's oil production boom will last for at least the next 18 months, according to Goldman Sachs.
Analysts said they expect oil production in the Permian Basin to remain strong through the end of 2026, despite crude oil production slowing slightly from its rapid pace in 2023. The US produced a whopping 12.9 million barrels of crude a day last year — drilling more oil than any other country in history, according to data from the US Energy Information Administration .
Oil production will keep growing, just at a slower clip in the coming years, the bank said. Researchers predicted that the US would churn out 340,000 barrels of crude a day in 2024 and a "still robust" 270,000 barrels per day in 2026.
That growth will largely be supported by increased drilling efficiency , as well as elevated oil prices. Drilling in the Permian Basin tends to be highly price-sensitive, and West Texas Intermediate crude prices are expected to remain above a key threshold of $50 for at least the next 18 months, the bank predicted.
"Drilling and completion efficiency continues to improve via lower drilling costs and shorter drilling and completion times," Yulia Grigsby, energy economist at Goldman Sachs Research, added in a note .
Slowing production, though, will largely be caused by the aging of the oil wells throughout the Permian Basin, where the average oil rig begins to stagnate after three to four years.
The number of active oil rigs in the region has fallen 30% from the average number recorded in 2018 and 2019 — and will likely keep falling through the end of 2026, the bank predicted.
Well production could rise to 100 barrels per day in 2024, but slow to around 50 barrels per day starting in 2025 — just a third of the growth recorded in 2019, it added.
"Years of intense exploration and production have had an impact on the rock quality of the basin, leading to geological deformations that limit further improvements in the productivity of oil wells," researchers said.
We NEED to be self-reliant. OPEN the Keystone pipe and get the prices down low again.
Ed Norton
07-28
Drill baby drill. Thank you President Biden and your administration. Now where are the DON-OLD supporters that were crying that ? They should be behind the great President Biden supporting him. Or are they just a bunch of hypocrites
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