U.S. Crude Oil Production Reaches Record High in August 2023: EIA

U.S. crude oil production reached an all-time high in August 2023, according to a Jan. 23 report published by the U.S. Energy Information Administration. The increase in production can be attributed to higher output in Texas. The state has primarily been producing relatively dense crude oil throughout 2023.

Oil production in Texas, which has remained the highest crude oil producing state, has a wide distribution of API gravities. The API gravity can be defined as the density of crude oil and petroleum products compared to water, and as a measure the higher the API gravity the lighter the crude oil, or less dense. In June 2023, crude oil production in Texas with an API gravity of between 30.1-40 degrees was recorded at 2.58 million barrels per day (b/d) and exceeded the crude oil production with an API gravity of between 40.1-50 degrees for the first time. Texas accounted for 57 percent of the total crude oil production with an API gravity between 30.1 and 40 degrees in the Lower 48 states.

Crude oil output with API gravity of 30.1-40 degrees significantly increased in New Mexico and North Dakota during the 10-month period from January to October 2023. North Dakota’s Bakken formation produces relatively light oil, with about 82 percent of the state’s production having API gravity in the 40.1- 50.0 degree range.

In the Lower 48 states, during the first ten months of last year, 19 percent more crude oil produced was in the gravity range of 30.1-40.0 degrees, compared to a similar period in 2022, and created a new high of 4.75 million b/d during September 2023. Lower 48 crude oil output with an API gravity between 40.1 and 50 degrees increased by 6.3 percent to 5.9 million b/d during the January-October 2023 period, in comparison to the same period in the prior year. Crude oil output with this density remains the largest share of Lower 48 oil production.

The growth in crude oil production with an API gravity of between 30.1 and 50 degrees is due to a number of factors, which are primarily economic. Higher crude oil sale prices have incentivized oil production for these denser oils. In addition, enhanced drilling technology has reduced the cost of production which further incentives production. Easier accessibility to refineries and consumer marketplaces due to enhanced transportation via pipelines have also aided production.