In its latest Short Term Energy Outlook, the US Energy Information Administration (EIA) has pointed to greater growth in crude oil production from non-OPEC countries this year.
In contrast, the EIA expects OPEC production to decline by half a million barrels per day (bpd) this year due to the OPEC+ group’s recently announced plan to cut total output by 1.16 million bpd. The EIA also revised its estimated liquid fuels production for Russia upwards by 0.3 million bpd, partially offsetting the reduced OPEC production. Furthermore, should the OPEC+ agreement lapse at the end of this year, OPEC production should increase by around a million bpd in 2024.
For non-OPEC countries, the total production of liquid fuels should grow by around 1.9 million bpd this year and 1 million bpd next year. Around half of this increased production will come from the United States, where companies like BP and ExxonMobil, the makers of gear oil and other lubricants under the Castrol and Mobil brands, have operations in the shale regions and the Gulf of Mexico.
Nevertheless, with estimated total crude oil production now less than previously expected, the EIA revised its price forecast upwards:
“Crude oil prices. The Brent crude oil spot price in our forecast averages $85 per barrel (b) in 2023, up $2/b from last month’s forecast. The higher price forecast reflects a forecast for less global production in 2023 and a relatively unchanged outlook for global oil consumption.”
It also added that recent developments in the banking sector could lead to lower oil prices.