Oil production in the prodigious Permian shale basin in Texas and New Mexico this year will see the slowest annual growth since 2021, according to market participants, as a slew of acquisitions reduces activity among private drillers.
Reduced growth in the Permian, the largest U.S. oilfield, will be a drag on overall gains in U.S. production. The slowdown comes even as output cuts from the Organization of the Petroleum Exporting Countries and allies (OPEC+) have supported prices, giving an incentive for non-OPEC+ producers to pump more.
U.S. oil output reached a record 12.93 million barrels per day (bpd) in 2023. The U.S. Energy Administration this month cut its growth forecast for 2024 by 120,000 bpd to 170,000 bpd, sharply down from growth of over 1 million bpd in 2023.
The Permian is expected to produce a record high 5.974 million barrels per day in February, though that will be the smallest month-over-month growth since July, EIA data showed.