UPDATE 2-US oil production rose to record high in October, EIA data shows

Adds analysts comments, details on supply and demand throughout

By Shariq Khan

NEW YORK, Dec 31 (Reuters) - U.S. oil production rose 260,000 barrels per day (bpd) month-over-month to a record 13.46 million bpd in October as demand surged to the highest levels since the pandemic, data from the U.S. Energy Information Administration showed on Tuesday.

U.S. oil output has grown rapidly this year as drilling operations became more efficient in the country, even as concerns of oversupply have weighed heavily on prices for the commodity amid weaker-than-expected demand growth, especially in China, the top oil importing nation.

Year-over-year, U.S. oil production rose 2.3% in October, while West Texas Intermediate (WTI) crude futures prices CLc1 averaged 16% lower during the month, according to Reuters calculations. WTI and global benchmark Brent crude LCOc1 are on track for their second consecutive annual losses in 2024. O/R

Still, the pace of growth of U.S. oil output is moderating, analysts said. Annual oil production growth in the U.S. is tracking around 300,000 to 400,000 bpd in 2024, versus nearly a million bpd in 2023, said Alex Hodes, energy analyst at brokerage StoneX.

"There have been a few infrastructure constraints that have kept production somewhat muted but I would expect that we will see a lot of the same in 2025," Hodes said.

Strong U.S. oil demand in October was the biggest surprise in the EIA's Petroleum Supply Monthly report, UBS analyst Staunovo added.

Total U.S. oil demand rose by about 700,000 bpd from September to 21.01 million bpd in October, the highest since August 2019, EIA data showed.

"The weak oil demand growth narrative seems not be confirmed by data," he said. "Likely we will see some 2024 demand growth upward revisions by energy agencies in January."

Oil output from top producer Texas rose to a record 5.86 million bpd in October, up about 55,000 bpd from September.

U.S. Gulf of Mexico oil output rebounded to 1.76 million bpd in October, up 191,000 bpd month-over-month, after hurricanes forced prolonged closures of production facilities in the region in September.

Natural gas production from U.S. Lower-48 states averaged 115.87 billion cubic feet per day (bcfd), up 1.2 bcfd from September, as Texas output rose to a record 36.49 bcfd.

(Reporting by Shariq Khan in New York; Editing by Chizu Nomiyama, Alexandra Hudson)

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