U.S. Domestic Barrel Bulge

May 12, 2017 | Kevin Anderson, CFA, Vice President

This week’s chart chronicles monthly U.S. oil production sourced from the seven major land production zones from January 2011 to April 2017. The price of oil experienced volatility over recent years resulting from macroeconomic factors like OPEC’s pump-at-will strategy and the subsequent supply glut that forced U.S. producers to reduce output. However, following OPEC’s production cut agreement in late 2016, U.S. oil production is on the rise, supported by rig productivity gains in both new and legacy wells as well as reduced capital costs. Gains from legacy wells have been particularly significant in the Eagle Ford and Bakken Regions since 2012, while in the Permian region an almost fourfold increase in new rigs from 2015 to 2017 helped solidify the area as the dominant production region. Overall, net imports of petroleum products as a share of consumption dropped from about 49% in 2010 to about 25% in 2015, showing progress towards a more energy independent U.S.

OPEC’s production cuts and a lower global supply signal positive news for U.S. producers. Khalid Al-Falih, the newly appointed Oil Minister of Saudi Arabia, committed to lengthening the OPEC supply cut on May 7th. “I am rather confident the agreement will be extended into the second half of the year and possibly beyond,” said Al-Falih. Lower breakeven costs and reduced supply from OPEC nations could incentivize U.S. producers to further ramp up production going forward.

Print PDF

Kevin Anderson, CFA
Vice President

Get to Know Kevin

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Related Content


The “Fix” Is In!

The strength of the U.S. economy over the last several quarters has surprised many investors, as consensus expectations from the…


The Emergence of Argentinian Equities

Argentina has faced myriad economic headwinds in recent time, including hyperinflation, currency-related difficulties, and a series of defaults on its…


Is Bitcoin Fairly Valued?

Despite mixed performance to start 2024, bitcoin finished the first quarter up roughly 68%. Buoyed by a broad weakening of…


Japan: This Year’s Vacation Recommendation

Foreign investment isn’t the only thing streaming into Japan. In 2023, the number of travelers to the country surpassed long-term…


The Banks’ Real Estate Problem

First quarter earnings season is getting started, with the largest banks reporting first. In the wake of last year’s regional…


First to Cut: The Fed or the ECB?

Based on implied probabilities derived from options markets, investors are currently forecasting an 82% chance that the European Central Bank…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >