The latest BNEF report estimates that US crude production will increase by more than 900,000 barrels next year. The expected production of 12.85 million barrels of crude per day exceeds the Energy Information Administration’s (EIA) forecast of 250,000 barrels.
Domestic oil production likely to increase next yearAppears solid and resilient despite recent volatility in commodity prices, mainly because US oil prices remain lowThe author of the report said BNEF analyst Tai Liu.
The analysis suggests that price hikes will likely continue to support production growth as EU sanctions on Russian oil take effect, as well as a global need for reliable energy access.
Growing concerns about a global slowdown have caused oil prices to plummet recently, with futures hitting their lowest level since January earlier this week. According to the report, oil producers will have to drop prices below $50 a barrel before they can change their plans for 2023.
The United States could see slow production growth in 2024 if producers don’t complete more wells. This could further tighten the market, especially if the demand for crude picks up in the next few years. The Organization of the Petroleum Exporting Countries and its allies already have limited capacity to increase production, Liu said.
BNEF estimates that production will increase from less than 200,000 barrels to 13.04 million barrels per day in 2024. Crude oil production in the Permian Basin is projected to reach 5.8 million barrels per day by the end of 2024.
The report also noted that the EIA production estimate has been lower than the previous BNEF forecasts. According to the report, EIA may be underestimating oil supply because the agency’s supply adjustments, which include any remaining crude that cannot otherwise be classified, are higher than regular seasonal levels.