As Rig Count Slips, U.S. Oil & Gas Production Begins to Flatten

According to analysis by John Kemp at Reuters, lower prices for oil and a slowdown in drilling activity are finally causing crude oil output to peak and turn down. In May, crude and condensates production for the Lower 48 states (excluding Gulf of Mexico production) rose by just 19,000 barrels per day compared with April. However, production was still up by more than 1 million barrels per day (+9%) compared with May 2022. What about natural gas? Like oil, gas production continued to increase in a lagged response to very high prices during the second and third quarters of 2022. As prices began to fall starting late last year, the number of drilling rigs targeting gas fell from an average of 162 in September 2022 to an average of 132 in July 2023. Gas production growth is set to slow sharply in the second half of 2023 and into the first half of 2024.

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