EIA: U.S. remains the largest hydrocarbon producer for the third straight year

The United States remained the world’s top producer of petroleum and natural gas hydrocarbons in 2014, according to Energy Information Administration (EIA) estimates. U.S. petroleum production increased by 3 quadrillion Btu (1.6 MMBOPD) in 2014, while natural gas production increased by 5 quadrillion Btu (13.9 Bcf/d) over the past five years. Combined hydrocarbon output in the world’s second and third largest producers, Russia and Saudi Arabia, increased by 3 quadrillion Btu and 4 quadrillion Btu respectively in the same time period.

US Russia and Saudi Production 2014 EIA

Since 2008, U.S. petroleum production has increased more than 11 quadrillion Btu, with dramatic growth in Texas and North Dakota. This trend continued last year despite oil prices falling by more than 50% since the second half of 2014. Total production increased to about 55 quadrillion Btu (about 27.5 MMBOPD) in 2014 from approximately 50 quadrillion Btu (25 MMBOPD) in 2013.

Russia reaches new record high

Production in Russia is split almost evenly between petroleum and natural gas, in energy content terms. Although Russian oil production continued increasing in 2014, natural gas production declined due to weak European economic growth and a warm 2013-2014 winter, says the report.

Crude oil production has continued to grow in Russia, largely thanks to state-owned giants Gazprom (ticker: OGZPY) and Rosneft (ticker: RNFTF). Russian production reached an average of 10.71 MMBOPD in March of this year, up 0.6% from February, setting a new record for post-Soviet levels of production. The previous monthly high was 10.67 MMBOPD, set in December 2014. Russia’s production record was set in 1988 when the country produced 11.41 MMBOPD while part of the Soviet Union.

Saudi Arabia raising prices in Asia

The world’s third largest producer, Saudi Arabia, differs from the U.S. and Russia in that the majority of its hydrocarbon production comes from petroleum. Saudi Arabia departed from precedents set in the past by deciding to maintain production despite global oversupply in 2014. As a result, the country’s total petroleum and natural gas hydrocarbon production was nearly unchanged from 2013, says the EIA.

Oil prices began to make a rally yesterday after U.S. benchmark crude West Texas Intermediate (WTI) fell below $50/bbl. This was due in part to increased confidence in healthy prices as state-owned Saudi Aramco increased its prices to Asian markets for the second straight month.  The discount for Arab Light to Asia was cut by $0.30/bbl to $0.60/bbl less than the regional benchmark, while Arab Medium will sell at a $2.00 discount in May, according to the company.

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