U.S. Oil Production Declines, Now Below Year-Ago Level

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The Energy Information Administration (EIA) said March 9 that U.S. crude oil production in December 2015 continued to decline as production reached its lowest level since November 2014. Production also fell from year-ago levels for the first time in more than four years. This continued production decline is the result of lower crude prices, which has fallen more than 70% since the summer of 2014.

Crude production in December 2015 averaged 9.3 MMbbld, down 166,000 bbld from December 2014 and the first year-over-year decline in U.S. monthly oil output since September 2011, according to data from EIA’s “Petroleum Supply Monthly” report released at the end of February.

Domestic oil production has generally declined month to month since reaching a 44-year peak of nearly 9.7 MMbbld in April 2015, the agency reports. Even as production fell, output was still above levels from the same month a year earlier until EIA published production for December 2015.

Most of the decline in oil production has occurred in states where a large portion of output comes from tight oil formations, including North Dakota, Texas, and New Mexico. Oil production from tight formations accounted for most of the increase in U.S. oil production during the past five years, and it is now making up most of the decline in output. EIA forecasts that U.S. oil production will continue to fall, both on a month-to-month basis and from year-ago levels, until the fourth quarter of 2017.

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