According to the Energy Information Administration’s (EIA) monthly report, U.S. crude oil production is set to achieve a new record high, reaching 12.76 million barrels per day (bpd) in 2023, marking an increase of 850,000 bpd. Subsequently, crude oil production is anticipated to rise by an additional 330,000 bpd to reach 13.09 million bpd in 2024, as indicated by EIA data.
Before the COVID-19 pandemic led to decreased demand and lower prices, the previous peak output stood at 12.3 million bpd in 2019.
This period also witnessed challenges for drillers due to elevated costs, which impacted profit margins and prompted calls from investors to curtail spending.
The upward revisions in production forecasts stem from expectations of enhanced productivity at the well level and an upswing in crude oil prices, as stated by the EIA. The global benchmark, Brent crude oil prices, are projected to average around $86 per barrel in the latter half of 2023, marking an increase of approximately $7 per barrel compared to the earlier forecast.
The EIA also projects a boost in U.S. GDP growth, forecasting a rise of 1.9% in 2023, an increase from the previous month’s projection of 1.5%.
The recent increase in crude prices can be attributed to several factors, including voluntary cuts in Saudi Arabia’s crude oil production and a growing global demand for oil. The EIA expects these factors to continue reducing global oil inventories and applying upward pressure on oil prices in the upcoming months.
As for the natural gas market, the EIA’s monthly report forecasts record highs in both U.S. production and demand for 2023. Dry gas production is projected to reach 103 billion cubic feet per day (bcfd) in 2023 and 104.12 bcfd in 2024, up from a record 98.13 bcfd in 2022. Domestic gas consumption is expected to increase from 88.53 bcfd in 2022 to 89.34 bcfd in 2023, before decreasing to 87.88 bcfd in 2024.
Contrary to its earlier forecast of a supply deficit in global oil markets for 2023, the EIA now anticipates a more substantial rise in non-OPEC OECD output. This shift has led to a change in its projection, as the agency initially believed that world petroleum consumption would surpass production in the current year.
