U.S. oil production rose 260,000 barrels per day month-over-month to a record 13.46 million bpd in October as demand surged to the highest levels since the pandemic, data from the U.S. Energy Information Administration showed on Tuesday.
U.S. oil output has grown rapidly this year as drilling operations became more efficient, even as concerns of oversupply have weighed heavily on prices for the commodity amid weaker-than-expected demand growth, especially in China, the top oil-importing nation.
Year-over-year, U.S. oil production rose 2.3% in October, while West Texas Intermediate crude futures prices CLc1 averaged 16% lower during the month, according to Reuters calculations.
Still, the pace of growth of U.S. oil output is moderating, analysts said. Annual oil production growth in the U.S. is tracking around 300,000 to 400,000 bpd in 2024, versus nearly a million bpd in 2023, said Alex Hodes, energy analyst at brokerage StoneX.
"There have been a few infrastructure constraints that have kept production somewhat muted, but I would expect that we will see a lot of the same in 2025," Hodes said.
Strong U.S. oil demand in October was the biggest surprise in the EIA's Petroleum Supply Monthly report, UBS analyst Giovanni Staunovo said.
Total U.S. oil demand rose by about 700,000 bpd from September to 21.01 million bpd in October, the highest since August 2019, EIA data showed. Demand for distillate fuels, which include diesel and heating oil, rose to 4.06 million bpd in October, the highest in a year.
