What Is Holding Back U.S. Oil Production?

What Is Holding Back U.S. Oil Production?

MIDLAND, TX - MAY 1: Workers extracting oil from oil wells in the Permian Basin in Midland, Texas on ... [+] May 1, 2018. (Photo by Benjamin Lowy/Getty Images) In the months leading up to the Covid-19 pandemic, U. S. oil production hit an all-time high of just below 13 million barrels per day (BPD). As the pandemic unfolded, demand collapsed, and production followed. By May 2020, oil production had dropped by more than 3 million BPD to 9. 7 million BPD. Since then, demand has recovered to pre-pandemic levels. Oil production, however, has only partially recovered. The most recent data available from the Energy Information Administration (EIA) shows current U. S. oil production at ~11. 6 million BPD — still 1. 4 million BPD short of pre-pandemic production. This shortfall is a major factor that led to the run-up of oil and gasoline prices over the past year. When the pandemic crushed oil demand in 2020, some oil companies went out of business. Some small stripper wells — which accounts for a respectable amount of U. S. oil production — were permanently capped given the bleak outlook. Some workers left the oil industry. Now, with oil prices over $100/bbl,