Timothy Birdnow

The Law of Unintended Consequences.


The U.S. Just Recorded Its Highest Oil Production Month In History

American oil is more expensive to produce than in other places as we must use hydraulic fracturing. So, by driving up the price of oil Biden has made it more profitable for American producers.

That was not intentional; he also labored to defund American oil prouducers by debanking them (pushed banks to deny loans)  and by spooking investors.

But in the end Biden made  it expensive enough to entice our domestic oil to produce anyway.

People forget that Donald Trump asked the Saudis for a production cut during Covid; he needed to get the prices up so our oil industry was competitive. Unfortunately that gave Joe Biden cover when he began driving oil prices through the roof.

FTA:

A year after the crash, the rig count had risen by over 50%. Two years later, it had doubled. And after two and a half years, the rig count had more than tripled from the levels of the crash.

So, contrary to the claims, oil companies were definitely drilling. But the nugget of truth is that they weren’t ramping up drilling as fast as they had in the past. They didn’t get back to pre-Covid levels, for a very simple reason. They had been burned multiple times over the past decade by over-drilling and causing prices to crash.

But it turns out that maybe the experts in the oil industry knew what they were doing, and the non-experts offering commentary on what they should be doing were way off base.

The fact is that oil production has been steadily rising since the Covid-19 crash. In each of President Biden’s first two years in office, production grew during the year. It will do so again this year.

By the beginning of 2023, it looked like the U.S. could set a new annual production record during the year. In fact, I made that one of my 2023 energy predictions in January.

I was less sure that the previous monthly production record — 13.0 million barrels per day (bpd) set in November 2019 — would be broken. We started 2023 at 12.6 million bpd, and by May that was only up to 12.7 million bpd. But high oil prices during the summer resulted in a production surge, and with the recent official release of the August monthly numbers, a new record was set at 13.05 million bpd.

Posted by: Timothy Birdnow at 10:08 AM | No Comments | Add Comment
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