Production in the United States continues to grow despite falling rig counts. Lower 48 onshore volumes exceeded previous records and reached 10.4 million b/d in April. However, S&P Global Commodity Insights has lowered expectations for oil prices in 2024 which could limit US production growth in the coming year.

Inflation and supply chain bottlenecks are expected to continue through the end of 2023 and will drive spending in North America. Limitations in high-specification equipment and labor will keep costs high for this year. Service providers are preferring to idle equipment rather than take price cuts as activity slows in gas-rich basins. A falling North America rig count, coupled with inflation, will keep capital expenditure (capex) relatively flat for the rest of 2023 and into 2024.

The story of the Permian's dominance continues as it will not only be the largest producing basin but will also have the largest production growth over the coming year. The Permian's dominance also means it will bear the brunt of the cost escalations.

This blog is an extract from the North American upstream industry trends report which provides an overview of developments and trends in the following areas:

• General economics and the oil and gas markets
• North American upstream oil and gas field development and operating, maintenance and decommissioning activities
• North American upstream oil and gas supply chains, as well as active oil and gas service contractors based in the region
• Effect of interesting developments on the North American upstream oil and gas markets

Customers can read the full report here or log on to our Connect platform to view all our detailedupstream industry trends and spendanalysis from S&P Global Costs and Supply Chain services.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.