Energy Department forecasts U.S. production of crude and other liquid hydrocarbons, including biofuels, will average 11.4 million barrels per day next year.
According to the Associated Press, U.S. oil output is surging so fast that the U.S. could soon overtake Saudi Arabia as the world’s biggest producer.
Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7% this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia’s output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020, helping to make North America “the new Middle East.”
The last year the U.S. was the world’s largest producer was 2002, after the Saudis drastically cut production because of low oil prices in the aftermath of 9/11. Since then, the Saudis and the Russians have been the world leaders.
Increased drilling is driving economic growth in states such as North Dakota, Oklahoma, Wyoming, Montana and Texas, all of which have unemployment rates far below the national average of 7.8%. North Dakota is at 3% and Oklahoma at 5.2%. Businesses that serve the oil industry, such as steel companies that supply drilling pipe and railroads that transport oil, aren’t the only ones benefiting. Homebuilders, auto dealers and retailers in energy-producing states are also getting a lift.
“Five years ago, if I or anyone had predicted today’s production growth, people would have thought we were crazy,” said Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.