Getting by without a few million barrels a day of Russian crude oil won't be easy for the global market, but it's gotta be done. One way to help ease the supply shortfall would be for U.S. E&Ps to ramp up their crude oil production, but the oil patch's output has remained close to flat — so far at least. Why aren't producers jumping in? Are the Biden administration’s policies and mixed messages on hydrocarbons putting the kibosh on production growth? Is it a scarcity of completion crews, or pipes or frac sand? Perhaps it’s worries that increasing production would send oil prices sliding and hurt producers’ bottom lines? Or is it all about ESG and the shift by many large investment funds and banks away from anything related to fossil fuels? Possibly all of the above? In today’s RBN blog, we look at what’s really behind the snail’s pace of U.S. crude oil production growth.
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Crude oil prices have been ratcheting higher for almost two years now, and spiking into the triple digits in recent weeks. For most of 2020 and ’21, the rise in Brent and WTI was tied to a disconnect between rapidly rebounding oil demand and only modest, measured increases in oil supply. More recently, the lurches in oil prices to points north of $120/bbl — levels not seen since 2012-13 or even 2008 — have been a response to the market uncertainties created by Russia’s invasion of Ukraine and the resulting sanctions against Russia imposed by the U.S. and its allies. So far, the reaction by U.S. E&Ps has been tepid at best.
U.S. oil production peaked at 13.1 MMb/d in March 2020, exactly when COVID-related shutdowns spurred hydrocarbon demand destruction the likes of which the U.S. had never seen (see Figure 1). Wells were shut in, the rig count and production plummeted, WTI “went negative,” and for the next 12-15 months U.S. oil production stayed close to flat at about 11 MMb/d, interrupted only by sharp, downward spikes for hurricanes and Winter Storm Uri in February 2021. Production inched up gradually after that (punctuated by a big drop after Hurricane Ida in August/September 2021), but has remained close to flat since October at about 11.6 MMb/d — 1.5 MMb/d below its pre-COVID peak — and hasn’t budged the last seven weeks.
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About the song
“I Can't Go for That (No Can Do)” was written by Daryl Hall, John Oates and Sara Allen. It appears as the third song on side one on Hall & Oates’s 10th studio album, Private Eyes. Released as the second single from the LP, it went to #1 on the Billboard Hot 100 Singles chart, becoming the duo's fourth #1 single. Recorded at Electric Lady Studios in March 1981, it became one of the most highly sampled songs in hip hop. Personnel on the record were: Daryl Hall (lead and backing vocals, synthesizer, drum machine), John Oates (backing vocals, electric guitar), Charles DeChant (saxophone) and John Siegler (bass).
Private Eyes was recorded at Electric Lady Studios in New York City in 1980-81 and produced by Daryl Hall, John Oates and Neil Kernon. Released in September 1981, the LP went to #5 on the Billboard 200 Albums chart and has been certified Platinum by the Recording Industry Association of America. Four charting singles were released from the album.
Hall & Oates (Daryl Hall and John Oates) are an American pop, rock and R&B duo formed in Philadelphia in 1970. They have released 18 studio albums, 11 live albums, 27 compilation albums and 63 singles –– 29 of which made it to the Billboard Hot 100 Singles chart. The duo are members of the Rock and Roll Hall of Fame and Songwriters Hall of Fame, and have a star on the Hollywood Walk of Fame. Both Daryl Hall and John Oates have had successful solo careers outside of Hall & Oates and are currently on tour as solo artists. The duo's last release was in 2006, and their last tour together was in 2019.
