In its latest Short Term Energy Outlook, the US Energy Information Administration (EIA) has predicted that US crude oil production will continue to rise next year while consumption remains flat.
The EIA predicts that with the US economy expected to contract slightly in the first half of this year, demand for petroleum and other liquid fuels will remain roughly flat at 20.3 million barrels per day (bpd). At the same time, despite US operators like Chevron, which makes the Texaco gas engine oil and grease products, having to deal with a dwindling number of highly productive plays and rising costs, US crude oil production will continue to grow by 590,000 bpd this year to reach 12.49 million bpd.
Outside the US, the EIA revised its previous forecast for Russian production of petroleum and other liquids due to Russia’s exports staying higher than previously anticipated. It now expects Russia to produce 9.9 million bpd, a drop of 1 million bpd. As China transitions away from its zero-COVID policy, the EIA expects the country to consume 700,000 bpd more crude oil this year, followed by a further 400,000 bpd increase in 2024.
Overall, the organisation expects the price of Brent crude to stay around $85 per barrel in the first half of this year. Despite the combination of reduced Russian output and increased Chinese consumption, it expects oil production to continue outpacing demand, leading to inventory builds and a drop in price to $82 per barrel.