US crude oil production decreases in 2016 despite fourth quarter growth

Total U.S. crude oil production in 2016 fell below 2015 levels despite growth in the fourth quarter of the year and rising oil prices.

Crude oil exports increased in 2016 following the elimination of limitations on exports of domestically produced crude oil at the end of the year prior. The difference between Brent and West Texas Intermediate (WTI) crude oil prices contracted at the same time, making crude oil imports comparatively more attractive and leading to an increase in total imports of crude oil in 2016.

U.S. crude oil production decreased over the first three quarters of 2016 from 9.2 million barrels per day (b/d) in January to 8.6 million b/d in September. By December, production rose to 8.8 million b/d.

Oil production for 2016 averaged 8.9 million b/d, which is lower than the 2015 average of 9.4 million b/d but still 1.3 million b/d greater than the average annual level over 2011–2015.

Production levels also differed considerably by region. The Permian Basin produced 1.9 million b/d in January 2016 and 2.1 million b/d by December. Production in the Federal Offshore Gulf of Mexico averaged 1.6 million b/d over the course of the year, the highest annual production ever for that area.

Shrinking price differences between international and domestic crude oil led to an increase in total U.S. crude oil imports. Levels grew by nearly 515,000 b/d compared to 2015 levels, reaching 7.9 million b/d in 2016.

U.S. crude oil exports averaged 520,000 b/d in 2016, a 12 percent from 2015 levels. Although 2016 was the first full year with no restrictions on exports of domestically produced crude oil, the recent decline in U.S. oil production led to a decrease in the pace of U.S. crude oil export growth compared to the 2013 to 2015 growth rate.