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Reporter's notebook: U.S. oil industry still depends on OPEC

From 2011 through July 2014, U.S. oil prices frequently hovered above $100 a barrel, and the industry boomed as if Spindletop gushed all over again. Wildcatters partied like it was 1901 as the shale boom shifted from natural gas to crude oil from Texas to North Dakota.

During that time frame, U.S. crude production rose 60 percent from 5.5 million barrels a day to 8.8 million barrels — the highest amount since 1986, when oil prices collapsed into the epic oil bust of generation ago.

The U.S. record was set in late 1970, when production exceeded 10 million barrels a day for two brief months.

Today, U.S. volumes have made a joke of the 1970 record, with production estimated by the federal government at 11.7 million barrels a day and growing. Natural gas production also is at an all-time high, making the U.S. the world’s top producer of the two major fossil fuels.

Related: Oil sector hangs in the balance as OPEC meets

Nickname it what you will, but the combination of horizontal drilling and fracking technologies let the oil sector’s cup runneth over with Texas tea, dinosaur wine, black gold and a bit of the bubbly crude.

So what happened when oil prices tanked — largely because of a global glut from the U.S. shale boom — after the summer of 2014? Many tens of thousands of workers were laid off, but production kept growing into 2015 to 9.65 million barrels — about 10 percent of global consumption — because of the drilling and production activities that were already underway.

Eventually, as prices stayed low and companies filed for bankruptcy, production fell to a low of 8.5 million barrels a day in September 2016 — slightly below the rollicking summer of 2014. At that point, a slow, painful recovery was taking shape.

The U.S. oil benchmark recovered from a 2016 low of $26 a barrel up to $76 in early October of this year. New technologies and efficiencies have made most companies profitable with oil prices just below $60 per barrel.

West Texas’ Permian Basin is leading it all by churning out nearly 3.7 million barrels a day — almost one-third of the nation’s crude production. For context, at the beginning of 2011, the Permian’s output was less than 1 million barrels a day.

The Energy Department projects the U.S. will average 12.1 million barrels of crude a day in 2019. U.S. Interior Secretary Ryan Zinke recently predicted it will skyrocket to 14 million barrels a day by the end of 2020. Close to 4 million of the daily barrels would be exported — nearly double the current export volumes.

On HoustonChronicle.com: As Trump lobbies against OPEC output cuts, energy sector, economy could take a hit

As is the nature of the cyclical industry and the relentlessness of U.S. energy companies, the booming production has led to burgeoning supplies and growing inventories. As a result, oil prices have plunged since early October.

As the U.S. seizes global market share, top producers such as Russia and Saudi Arabia are in the position to curb output to stabilize prices. The United States is again proving it can churn out enough crude to flood the world with oil, forcing other producers with central control of the industry to cut back to avoid the type of collapse that pushed scores of companies into bankruptcy and cost Houston tens of thousands of jobs in recent years.

Despite the talk of energy independence, today’s situation shows that the United States and its oil industry still very much depend on Saudi Arabia, Russia and OPEC. Oil remains a global commodity that is subject to shifts in the world economy and geopolitics.

Maybe the only true certainty is that the cyclical nature of oil will continue, ebbing and flowing with the volumes of crude coming on the market.