U.S. oil production jumped last week to the highest level since January 1992, cutting consumption of foreign fuel and putting the U.S. closer to energy independence.
Drilling techniques including hydraulic fracturing, or fracking, pushed crude output up by 134,000 barrels, or 1.8 percent, to 7.401 million barrels a day in the seven days ended July 5, the Energy Information Administration said today.
Rising crude supplies from oilfields including North Dakota’s Bakken shale and the Eagle Ford in Texas have helped the U.S. become the world’s largest exporter of refined fuels including gasoline and diesel. The shale boom has also helped cut world reliance on OPEC oil even as global demand gains.
“It adds to supply in a world where demand continues to grow, and it certainly reduces our reliance on OPEC,” said Andy Lipow, president of Lipow Oil Associates LLC, a Houston-based consulting firm, who expects output to reach 7.75 million barrels a day by the end of this year.
The U.S. met 89 percent of its own energy needs in March, the highest monthly rate since April 1986, EIA data show. Net imports of crude oil and petroleum products will fall to 5.7 million barrels a day by 2014, down from 12.5 million in 2005, the EIA said yesterday in its Short-Term Energy Outlook.
Domestic crude output will average 7.31 million barrels a day in 2013 and 8.09 million in 2014, the EIA, a unit of the Energy Department, said in the report.
The Organization of Petroleum Exporting Countries said today that consumption of its crude will decline 300,000 barrels a day next year to 29.6 million, 2.6 percent less than the 12-member group is pumping now. World oil consumption will advance by 1 million barrels a day, or 1.2 percent, to 90.7 million next year as emerging nations expand and developed economies continue to recover, the organization’s Vienna-based secretariat said in its monthly market report.
The abundance of crude has made the U.S. an increasingly important refining hub. Distillate production, largely comprised of diesel fuel, soared to a record 5.036 million barrels a day last week, the EIA said today.
Some of that will be put on tankers to meet foreign demand. Venezuela, for example, imported an average of 94,000 barrels a day through April, compared with 85,000 barrels a day in 2012, EIA data show. China’s imports expanded to 108,000 barrels a day, also up from 85,000 last year.
“Refiners have been modifying and investing in their operations to produce increasing amounts of diesel, which is growing worldwide at a much faster rate than gasoline demand,” Lipow said.
West Texas Intermediate futures rose $2.99, or 2.9 percent, to $106.52 a barrel on the New York Mercantile Exchange, the highest settlement price since March 27, 2012.
Sourced from Bloomberg