US Crude Oil Production in the Gulf of Mexico is Closing In on a Record High

Almost seven years after the Deepwater Horizon accident crude oil production in the US part of the Gulf of Mexico is within striking distance of an all-time high. The assessment is based on the data provided by the Energy Information Administration (EIA).

According to the EIA, 1.68 million barrels per day were produced in the Gulf’s US part as of November 2016, which was the highest level of output since February 2010. Oil production in the Gulf has been gradually recovering since 2013 and the improvement in crude oil prices could give it that push to roll over the highs of September 2009.

The accident at the Deepwater Horizon offshore platform on April 20, 2010 dealt a severe blow to oil output in the region. 11 people died in the explosion, which led to the largest oil spill in history: 4.9 million barrels of crude oil were discharged into the Gulf’s waters until the well was finally declared sealed only five month later. The platform itself sunk 36 hours after the accident.

In the aftermath of the catastrophe, many oil producers curbed their drilling activity and production declined by 26 percent over the next 17 months.

However, interest in the Gulf’s deepwater oil deposits remains strong and majors are returning to the area as oil prices make their way higher. At the start of 2016, Chevron sold its 19 shallow-water deposits in the Gulf of Mexico to focus mainly on deepwater projects. BHP Billiton is considering investing into the area, while Anadarko Petroleum acquired block #91 from Freeport-McMoRan. Exxon is endorsing the Gulf by rolling out output at the Julia deposit.

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Donald is a strategist for economiccalendar.com. He specializes in a fundamental approach while informing traders of relevant economic data. Actively trading since university, Donald trades indices and commodities. He earned his Bachelor's in Finance from Baruch College's Zicklin School of Business in New York City.