Crude oil production in the U.S. Lower 48 (L48) states, which excludes Alaska and offshore production, reached a record 11.3 million barrels per day (b/d) in November 2024, according to our estimate in the latest Short-Term Energy Outlook STEO, published on December 10. Crude oil production in the L48 states increased 3% year over year despite fewer active rigs in most major producing regions, demonstrating gains in operational efficiency.
Data source: U.S. Energy Information Administration, Short-Term Energy Outlook,, December 2024 Note: The production values do not include Alaska or offshore production.
Rigs drill oil wells, and an increased number of active drilling rigs indicates that U.S. producers are drilling more wells, which generally results in growing oil production. Our latest STEO shows the active rig count decreased year over year in 2024 through November in all L48 primary crude oil producing regions except the Bakken. The region with the most activity, the Permian Basin, declined from 310 rigs to 303 rigs between November 2023 and November 2024. The active rig count for these regions, which includes the Permian, Eagle Ford, and Bakken, declined 18% to 389 rigs since the recent January 2023 high. Data on 34 publicly traded exploration and production companies also suggest increasing well productivity is helping reduce companies’ production cost per barrel.
Oil and natural gas companies are increasingly leveraging technological advances, including artificial intelligence, electronic hydraulic fracturing technologies, and automated drilling processes, to optimize operations while operating fewer rigs, according to trade press. This shift toward digital solutions has improved drilling and completion techniques and reduced rig downtime, and it provides advanced analytics to help target future operations.
These technological solutions have allowed producers to increase production rates for rigs as they drill new wells. Improved performance is particularly evident in the Permian region, where we observed a 9% year-over-year increase in November’s crude oil productivity per active rig.
In our latest STEO, we forecast L48 crude oil production will increase by an average of 260,000 b/d from 2024 to a record-high 11.3 million b/d in 2025. We expect that productivity per rig will increase again next year due partly to the realization of technological improvements and additional pipeline capacity coming online that will allow for increased production. The recent addition of the Matterhorn Express pipeline in the Permian region provides additional takeaway capacity for associated natural gas. Natural gas takeaway constraints can limit drilling activity, and the new capacity will allow producers to increase crude oil production in the Permian region.
Principal contributor: Merek Roman
