According to Rystad Energy, the U.S. oil production is to touch an annual all-time high by September 2015.
Rystad considers that an average 2015 output of 9.65 million barrels a day will be reached in five months - topping the previous peak annual reading of 9.64 million barrels a day in 1970.
The US crude inventories stand at a record 471.4 million barrels, based on data from U.S. Energy Information Administration, also going back to the 1970s.
The 46% drop in crude prices last year was the main reason of the staggering pace of production from shale drilling and hydraulic
fracturing.
In case production does top out, then supply levels may soon hit a peak as well which in turn could lead to shrinking supplies.
The estimate of the oil-and-gas consulting-services firm includes crude oil and lease condensate
(liquid hydrocarbons that enter the crude-oil stream after production),
and assumes an average price of $55 for West Texas Intermediate crude
oil.
The forecast peak production level in September is also dependent on horizontal oil rig counts for Bakken, Eagle Ford and Permian shale plays stabilizing at 400 rigs, as Per Magnus Nysveen, senior partner and head of analysis at Rystad notes.
In this case, undoubtedly, hitting peak production is not assured.
“Some will be debating whether the U.S. has reached its peak
production for the current boom, without addressing the question of what
level will U.S. production climb to in any future booms,” said Charles
Perry, head of energy consultant Perry Management.
“So one might also say U.S. peak production is a moving target.”
James Williams, an energy economist at WTRG Economics, said that according to his calculations, peak production may have already happened or may occur in April, as the market has seen a decline in North Dakota production, with Texas expected to follow.
