Bloomberg reported the Permian Basin will soon produce crude oil at levels not seen since the start of the pandemic, a promising signal that the U.S. and global economy is ramping back up. Texas, in large part due to the Permian, is the largest oil-producing state in the nation, playing a key role in keeping U.S. energy affordable and accessible.
Higher prices are buoying drillers’ confidence. Benchmark Nymex oil gained nearly 35% in the past four months after OPEC and its alliance cut production to strike a balance between demand and supply. The fossil fuel is also getting a bump as Covid-19 vaccinations progress and Americans travel again, boosting gasoline consumption.
Output in the basin will reach 4.466 million barrels a day in May, the most in a year, and rig counts have touched a one-year high, according to the latest data from the Energy Information Administration. Total American crude production peaked at over 13 million barrels a day last year before the global pandemic crushed oil prices, forcing scores of drillers to file for bankruptcy and shutter wells.
As the economy bounces back and the world returns to “normal,” it is critical that U.S. energy resources are there to pave the way. The oil and gas industry will play an important role in the return to widespread travel, and will continue to provide economic, national security, and energy security benefits.