IHS Markit’s vice chairman, Daniel Yergin, has predicted that US oil production could rise by as much as 900,000 barrels per day (bpd) this year.
While speaking on the Squawk Box Asia show on CNBC, Yergin said:
“The U.S. is back. For the last year, year and a half, it’s been OPEC+ running the show, but U.S. production is coming back already, and it’s going to come back more in 2022.”
Yergin also said that the US administration had been asking for increased production from domestic operators, pointing out that he had personally been on two calls where increased oil production was requested by the US Energy Secretary. Yergin explained that this was because the administration was worried about high inflation and the political consequences it brings.
The vice chairman also said he did not expect oil prices to exceed $100 per barrel unless some significant geopolitical upset occurred, with him expecting it to stay mostly between $65 and $85. This would make it profitable for oil and lubricant producers like Exxon Mobil and Castrol owner BP to scale up their shale operations.
The US was producing an average of 12.29 million bpd in 2019, but this fell to 11.28 million bpd in 2020 as the COVID-19 pandemic led to lockdown and travel restrictions being brought in around the world, thus reducing the demand for crude oil and its price. It is expected to rise to 11.85 million bpd this year, which would still be below pre-pandemic levels.