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Market Snapshot: U.S. Crude Oil Production Reaches 9 Million Barrels per day
Release date: 2015-01-22
According to the U.S. Energy Information Administration, crude oil production in the U.S. rose to 9 million barrels per day in October 2014, the highest since early 1986. After a long period of declining production, the growth rate rebounded in 2009 with the development of tight oil; year-over-year production growth reached over 1.2 million barrels per day in the summer of 2014.
Figure Source and Description
Description: This line chart depicts U.S. crude production on a monthly basis from 1960 to October 2014. Production grew steadily from 1960 until the early 1970s, when production reached its highest level of over 10 million barrels per day. Production then declined for another 5 years after which it climbed slowly until the mid-1980s. After this point production declined steadily until 2005, where it flattened around 5 million barrels per day until 2011. Starting in mid-2011, production began increasing rapidly, reaching 9 million barrels per day by late 2014.
In comparison, Canadian oil production averaged 3.7 million barrels per day in the first half of 2014. In the past 5 years, U.S. production has grown by the equivalent of Canada's total production.
Rapidly growing U.S. production has helped push global oil prices significantly lower since September 2014 and oil-directed drilling in the United States is already showing signs of slowing. While U.S. oil production is expected to continue to grow into 2015, it will likely slow significantly.
The United States is currently the largest market for Canadian oil, accounting for over 95 per cent of Canada’s crude oil exports. Before tight oil reversed the decline in U.S. production, it was expected that the United States would require increasing levels of crude oil imports to meet demand for refined products like gasoline and diesel. However, the growth in U.S. domestic production has changed that perception. While Canadian crude oil can still increase its share of the U.S. market by displacing other foreign crude oils, the U.S. is expected to be significantly less reliant on imports for the foreseeable future.
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