US Crude Oil Production Expected to Increase

The US Energy Information Administration’s monthly report predicts a significant rise in crude oil production

Expectations for 2023

The US Energy Information Administration’s monthly report is expected today, Tuesday, that US crude oil production will increase by 850 thousand barrels per day, to 12.76 million in 2023.

Administration data showed that crude oil production is expected to rise by 330,000 bpd to 13.09 million in 2024.

Impact of the Pandemic

U.S. oil production hit a record 12.3 million barrels per day in 2019 before the Covid-19 pandemic crashed demand and prices, while drilling was impacted by rising costs that slashed profit margins and investor demands to contain spending.

Factors Driving the Increase

The Energy Information Administration said the expected increase was due to expectations of improved well productivity and higher crude oil prices.

The management report expects the price per barrel to reach $86 in the second half of 2023, about $7 higher than previous expectations.

Crude oil prices have been rising since June, mainly due to Saudi Arabia voluntarily cutting crude oil production and boosting global demand.

The Energy Information Administration said: “We expect these factors to continue to reduce global oil inventories and put upward pressure on oil prices in the coming months.”

Future Outlook

The administration estimates that growth in global oil production in 2024 will keep pace with oil demand and put downward pressure on crude oil prices starting in the second quarter of next year.

The administration expected total US oil consumption to rise by 200,000 bpd to 20.5 million in 2023, on top of another 200,000 bpd in 2024 to 20.7 million.