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"Given that oil is priced on an international market, increased domestic oil production will not do much to lower prices for U.S. consumers, as any gains in U.S. production will be spread across the international market. Greater reliance on domestic oil resources in substitution for imports will reduce the vulnerability of the economy to oil supply disruptions, although not by much."
Council On Foreign Relations
This is an important chart for all the greater "rig efficiciency" believers and the surprise production increases that occured in 2023.
This would imply that because drilling rigs did drill more holes in the ground in 2023, more completions occurred and production went up in 2023, in spite of falling rig counts. Historically the Permian has been completing about 5,400 wells each year (2018-2019, 2021-2022) then in 2023 those completions went to 6,000.
But if you research this more closely, DUC's in the Permian declined 450 plus in 2023 (Enverus, Novi) and those did not have anything to do with fewer rigs drilling more holes in the ground.
The greater efficicency thing played a very minor role in the Big Surprise of 2023. It was DUC's getting completed.
In 2024 Permian completions are down in the low 400's per month, a more realistic number of completions per month given the current rig count. DUC's are pretty much gone at current prices.Permian production is growing only marginally, as a result, and by year end may even be flat.
Below, U.S. associated gas flaring from tight oil wells up 20% YOY in 2023. We now flare more gas than Nigeria !!
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