ES #140: Record U.S. Production, Fading Growth

A closer look at underlying trends in the EIA’s delayed monthly data reveals signs of diminished growth potential that precede 1) WTI’s recent retreat to $60 (Mar ‘25 WTI settled at $72.57 and Apr ‘25 WTI settled at $68.28) and 2) the latest additions to OPEC’s accelerated production schedule.

June 01, 2025 • Est. Reading Time: 6 minutes

Energy Shots #140

The Department of Energy published its delayed monthly petroleum data on Friday, providing an opportunity to evaluate 1Q25 domestic supply and balance-2025 growth potential under an accelerated OPEC+ production schedule.

  • This weekend’s meeting between the eight members of the OPEC+ voluntary cut crew yielded a third consecutive 411 kb/d production increase in July, bringing the group’s total YTD production growth to 1.37 MMb/d out of the 2.2 MMb/d tranche of voluntary cuts that was extended last December.

Total U.S. Crude Production Through 1Q25

The DoE’s headline figure for total U.S. crude production hit a record 13.49 MMb/d in March, up 248 kb/d month-on-month and 317 kb/d year-on-year.

  • Note: The EIA’s monthly production print came in 87.5 kb/d below the average of its weekly estimates in March, bringing the average difference between its monthly and weekly production data to -220 kb/d in 1Q25.

While record March output is likely to raise concerns about combined OPEC+/U.S. supply growth, a closer look at underlying trends in the EIA’s delayed monthly data reveals signs of diminished growth potential that precede 1) WTI’s recent retreat to $60 (Mar ‘25 WTI settled at $72.57 and Apr ‘25 WTI settled at $68.28) and 2) the latest additions to OPEC’s accelerated production schedule.

Annualized Growth, Total U.S. Crude Production

Annualized production growth over the trailing twelve months ending Mar 2025 slowed to an average of 295 kb/d in the EIA’s monthly production series, marking a 60.2% decrease from the average annualized growth rate of 741 kb/d for the twelve months ending Mar 2024.

U.S. Tight Oil Output by Play

U.S. tight oil production gained to an average of 9.15 MMb/d in April 2025, up 2.8% Y/Y but shy of the all-time high of 9.17 MMb/d set in November 2024.

  • Permian production gained to an average 5.72 MMb/d in April, short of the previous record of 5.73 MMb/d set in December 2024.

As shown below, annualized growth in total U.S. tight oil production sank to its lowest decadal level outside of COVID 2020 and the depths of the 2015-2016 Saudi-U.S. price war.

  • Bakken output fell 59 kb/d Y/Y, marking its eighth annualized decrease in the trailing nine months.

  • Permian output increased 193 kb/d Y/Y in April, bringing the trailing 12M average annualized change in Permian production to +316 kb/d—the lowest rate since Dec 2021 and roughly 70% below peak growth levels in 2018/2019.

U.S. Output In The New OPEC-Driven Price Regime

Prevailing concerns about an OPEC-driven supply overhang will likely put the market on its heels to begin the week, though stakeholders should caution overly bearish narratives that ignore relatively resilient YTD demand-side data that will benefit from the arrival of summer driving season.

On the supply side, the latest OPEC+ hike of 411 kb/d indicates the group is increasingly focused on regaining market share after multiple years of holding 3-6 MMb/d offline.

Considering the mounting pressure on government budgets within OPEC+, however, the group will likely aim to hold prices in a ‘Goldilocks’ range—below levels that allow for marginal U.S., Canadian, and South American barrels but high enough to limit deficit expansion.

As outlined above, annualized U.S. production growth shows clear signs of deceleration over the past two years. Benchmark pricing at or below $60 will further decelerate U.S. production growth, with current trends indicating this year’s net change in U.S. output could be flat to slightly negative.

While the EIA’s weekly data has consistently deviated from the EIA’s delayed monthly figures, the trailing four-week average of total U.S. crude production sank to 13.386 MMb/d last week. Considering the tendency of EIA weekly data to overestimate values reported in delayed monthly data, current output could be ~150 kb/d to 200 kb/d below 1Q25 highs.

See you next Sunday.

ES.

This commentary contains our views and opinions and is based on information from sources we believe are reliable. This commentary is for informational purposes, should not be considered investment advice, and is not intended as an offer or solicitation concerning the purchase and sale of commodity interests or to serve as the basis for one to decide to execute derivatives or other transactions. This commentary is intended for Mobius clients only and is not considered promotional material.