Although US oil output may exceed the 1970 record of an average of 9.6 million barrels per day, US oil drilling has started to slow down in general, especially with a rise in companies facing technological, logistical and financial issues. Drilling expenses are increasing due to higher costs for labor and services. Investors are worried that US growth in oil output may peak sooner than later. Recently, the growing production of shale served as a substitute for a dearth of oil supply in the world, but leaders in the oil industry predict that its success is not as limitless as expected.

In September, the US Energy Information Administration (EIA) cut its forecast for US oil production 1.3% to 9.69 million barrels per day, but some oil companies believe that figure is still inflated. The EIA has defended its forecast, citing the Permian basin, an area in Texas and New Mexico, as the “hottest drilling spot in the world,” thus justifying the recent prediction. Although oil prices rose to more than $50 per barrel in September, executives from prominent US oil companies stated that even if prices rise to $60 per barrel, they do not have plans to spend more on drilling.

Source: The Wall Street Journal