North America on track to reach new high in 2023

North American production is set to exceed 41 million boe/d in 2023. By comparison, Middle East oil and gas output in 2023 is just over 38 million boe/d.

“North America has an advantage that Europe and mainland China (and many other nations) do not. The United States and Canada produce more oil and gas than any other region in the world – and they also produce more than they consume.” – Celina Hwang, Director, North American Crude Oil Markets, S&P Global Commodity Insights.

The new high underscores the dramatic turnaround in North American production that has been driven by unconventional oil and gas, including shale oil, shale gas and the Canadian oil sands.

Since 2008 – when US oil production hit a 62 year low – the region has more than doubled its oil and gas output. By contrast, Middle East production grew by 25% over the same period.

“Secure domestic oil and gas production of this magnitude is a significant advantage. North American consumers and industries are shielded to some extent from the severe pressure on energy supply and price extremes that Europe, and to a lesser extent, mainland China have faced in recent years. The average cost of natural gas in 2022 was over 80% less in North America than in Europe and mainland China.” – Kevin Birn, Vice President, Canadian Oil Markets Chief Analyst and Head of Centre for Emissions Excellence, S&P Global Commodity Insights.

In the US, natural gas production has soared from 54 billion ft³/d to more than 100 billion ft³/d since 2008. The growth in US oil production has been even more pronounced. Since 2008, US crude oil production has grown from 5 million bpd to 12.2 million bpd – a 145% increase – and is likely to reach 12.7 million bpd by the end of 2023.

At the same time, Canadian oil production has risen 2.8 million bpd since 2001 – nearly all of this growth coming from Canadian oil sands – on the way to becoming the world’s 4th largest producer. Total Canadian oil production is set to reach 4.9 million bpd in 2023.

The relative importance of the North American advantage in oil and gas production has continued to grow as Europe, North America and others are de-integrated from Russian oil and gas in response to the invasion of Ukraine.

“If North American oil production was stuck at 2008 levels, Russia’s leverage in world energy markets would have been far higher than it already was on the eve of the Ukraine invasion. It would have been exceptionally difficult, if not impossible, for supplies from North America to not only protect North America consumers, but also help fill the gap left by the cutoff of Russian oil and gas to Europe.” – Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy and Mobility, S&P Global Commodity Insights.

Read the article online at: https://www.worldpipelines.com/business-news/23122023/north-america-on-track-to-reach-new-high-in-2023/