US Oil & Gas Output Curbed by Lower Prices: Reuters

US oil and gas production is showing further signs of flatlining or falling, a delayed response to the falling prices over the last two years, according to Reuters’ analyst Brian Kemp.

• Total crude and condensates production from the lower 48 states averaged 11m b/d in May, up from 10.6m b/d on the year.
• However, production growth compared to the prior year slowed to just 0.4m b/d from 0.8m-1m b/d in early 2023.
• Drilling activity responds to change in prices with a delay of around 4-5 months and production responds with a lag of around 7-8 months.
• US gas production has fallen much more sharply than oil, with the largest seasonal decline in output since the first wave of the pandemic in May 2020.
• However, the adjustment process is well underway, and inventories are likely to revert to more normal levels by the end of winter 2024/25, Kemp said.