Oil production in the Lower 48 states is expected to soon exceed levels experienced before the pandemic, says oil and gas entrepreneur Adam Ferrari.
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Energy entrepreneur Adam Ferrari is enthusiastic about how oil production is set to grow in the next five years, and for good reason.
GlobalData recently reported that, by 2030, U.S. oil production is expected to reach 12.9 million barrels per day. That's up from the 10.96 million barrels per day the country was producing at the beginning of 2021.
The most significant increase in oil production is expected to come in the Permian Basin, according to the GlobalData report. The Permian Basin is a large region in the southwest United States that includes Midland and Odessa in Texas and Hobbs and Carlsbad in New Mexico.
While oil production waned at the outset and early portions of the COVID-19 pandemic, the encouraging sign is production in the Lower 48 states is expected to soon exceed levels experienced before the pandemic. A major reason for this is the significant improvements made in drilling over the last year.
The GlobalData report projects that U.S. shale production will once again reach levels seen before the pandemic by 2024. The improvements made in drilling are expected to decrease the break-even mark for unconventional projects to roughly $35 per barrel, which will fuel increased production in the industry.
While oil prices have increased significantly over the last year, the outlook for the U.S. industry is so favorable because companies continued to invest in strategies based in core assets that produce high returns.
While the report noted that oil and gas rig count is down 29% year-over-year, it did grow steadily in the first half of 2021. As of January, there were 332 operational rigs among all the major players in shale. By June, that number increased by almost 26%, up to 418 total.
Adam Ferrari echoes a recent forecast released by the U.S. Energy Information Administration, which shows that crude oil production in the United States is likely to remain at current levels throughout the end of 2021 before increasing by 3.5% in 2022. The main drivers of that growth are expected to be "onshore tight oil production," according to the EIA's short-term energy outlook (STEO).
One potential concern for the industry is the Biden administration's attempt to limit leasing on federal lands. Still, the courts lifted a freeze on drilling earlier in 2021, allowing projects to resume.
In the long run, this could be a major roadblock to continued growth in U.S. oil production. However, it is unlikely to cause significant disruptions in production in the short term, as drilling is still allowed on land covered by federal leases that haven't yet expired.
About Adam Ferrari
Adam Ferrari is a chemical engineer and is the founder of the mineral acquisitions company Ferrari Energy, based in El Segundo, CA. He was originally trained as a chemical engineer, a degree that he completed magna cum laude. After graduation, he entered the business sector, where he gained significant experience in both finance and investments.
Contact Info:
Name: Adam Ferrari
Email: Send Email
Organization: Ferrari Energy
Address: 2150 Park Place Suite 100
Phone: 310-692-1816
Website: https://www.ferrarienergycorp.com/%20
Source URL: https://marketersmedia.com/adam-ferrari-explains-how-us-oil-production-outlook-is-set-to-grow/89050042
Source: MarketersMEDIA
Release ID: 89050042
