In its latest forecast, the US Energy Information Administration (EIA) has predicted that US production of crude oil will rise to a new record level next year.
The current record of 12.3 million barrels per day (bpd) for average daily production was set in 2019, just before the novel coronavirus started to send oil prices tumbling, leading to many operators pairing back their production. The EIA now expects US production to recover to 11.9 million bpd this year as shale operators like Chevron, the maker of the Texaco lubricant range, ramp up production again before setting a new record of 12.8 million bpd next year.
Anyone hoping for an imminent decrease in oil prices may be disappointed, however, as Joe DeCarolis, the EIA Administrator, explained in a statement that:
“We have consistently forecast that elevated crude oil prices would help drive record-level annual US oil production levels in 2023. Low global oil inventories coupled with continued high demand for gasoline, diesel, and other petroleum products means that increased production likely won’t have much impact on prices in the short term.”
The EIA’s current predictions for Brent pricing have it at $107 per barrel for this quarter, before dropping slightly to $103 per barrel in the second half of the year. It then expects this to drop to $97 per barrel on average next year, although the EIA attaches a high degree of uncertainty to this forecast. For example, it cannot predict how other oil producers, such as the OPEC+ group, may react in future.