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Saturday, February 29, 2020

U.S. oil and gas output in December pulled back from record highs

© Reuters. Pump jacks operate at sunset in Midland© Reuters. Pump jacks operate at sunset in Midland

NEW YORK (Reuters) - U.S. crude oil and natural gas production pulled back in December from record highs reached a month earlier, according to monthly government data released Friday.

U.S. oil output fell to 12.78 million barrels per day in December from 12.86 million bpd in November, the U.S. Energy Information Administration (EIA) said in its Production Supply Monthly report. The decline was the first pull-back since July.

Output in the Gulf of Mexico fell 47,000 bpd and North Dakota production dropped by 40,000 bpd, according to a separate EIA monthly publication, known as the 914 report. Texas, the top shale producer, saw output rise by 32,000 bpd in the month.

U.S. crude production has soared due to technological advances for production from shale formations. Despite the decline in December, weekly production data from the EIA suggests that crude output has risen in January and February, setting a record of 13 million bpd.

At the same time, fuel demand fell, with both gasoline and distillate demand dropping from the previous year.

Gasoline demand in December dropped about 2.5% from a year earlier, to 8.945 million bpd. This was a steeper decline than the 1% year-on-year drop seen in November. Seven of the months in 2019 saw less gasoline demand than in same months the previous year.

Demand for distillate fuel, which includes diesel and heating oil, fell 3% from the previous year to 3.901 million bpd, compared with a 0.4 percent decline seen in November.

Monthly gross natural gas production in the U.S. Lower 48 states, meanwhile, slipped to 106.8 billion cubic feet per day (bcfd) in December from a record 107.2 bcfd in November, according to the EIA's 914 report.

That 0.4-bcfd decline in Lower 48 gas production was the first decline in seven months.

In Texas, the biggest gas producing state, output increased 0.6% to 29.4 bcfd in December. The state's monthly all-time high was 29.6 bcfd in October 2019.

In Pennsylvania, the second-biggest gas-producing state, output fell 1.9% to 19.5 bcfd in December, down from a record high 19.9 bcfd in November.

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