According to the latest Short-Term Energy Outlook from the US Energy Information Administration (EIA), the US could be producing an average of 12.6 million barrels per day (bpd) in 2023, which would be a new record high.
Oil production in the US declined significantly at the start of the COVID-19 pandemic, and many operators have been reluctant to increase production since. Majors like Chevron and ExxonMobil, owners of the Texaco and Mobil lubricant brands, have already announced major increases in shale oil production, but it seems higher oil prices are also tempting other drillers into increasing production. In the most recent month that the EIA has had hard data for, namely November last year, oil production already reached 11.8 million bpd.
In terms of oil prices, the EIA says it expects the average price of Brent Crude to be $90 per barrel this month due to global oil inventories continuing to decline, with this supporting the current level of pricing in the near term, adding:
“However, we expect downward price pressures will emerge in the middle of the year as growth in oil production from OPEC+, the United States, and other non-OPEC countries outpaces slowing growth in global oil consumption.”
This production growth in the US, OPEC+ and other countries should bring, according to the EIA’s forecast, the price of Brent Crude down to about $75 per barrel by the end of 2022, which should provide some relief to the consumers of oil and derivative products.