The U.S. Energy Information Administration (EIA) announced on Wednesday that both U.S. and global oil production forecasts have been slightly increased, projecting record highs for this year.
U.S. Oil Production:
The EIA now anticipates U.S. oil output to average 13.23 million barrels per day (bpd) in 2023, an increase of 300,000 bpd from last year’s record of 12.93 million bpd. This is a slight upward revision from the previous forecast of 13.22 million bpd.
For 2024, U.S. production is expected to rise to 13.53 million bpd, down slightly from the 13.54 million bpd projected in October.
Global Oil Production:
The global oil output forecast for 2024 has been raised to 102.6 million bpd, up from the prior estimate of 102.5 million bpd. The EIA expects world output to reach 104.7 million bpd in 2025, an increase from 104.5 million bpd previously.
Demand Growth Concerns:
Oil demand growth remains contentious among forecasters, influenced by varying assessments of China’s consumption and the transition pace to alternative energy. The EIA now expects global oil demand to grow by approximately 1 million bpd in 2024, an increase from the earlier forecast of 900,000 bpd.
OPEC’s Adjustments:
OPEC has revised its 2024 forecast downward for the fourth consecutive month, yet still anticipates a growth rate of 1.82 million bpd. In contrast, the Paris-based International Energy Agency (IEA) expects growth of 860,000 bpd.
Price Outlook:
The EIA indicated that OPEC+ production cuts should support global oil prices through the first quarter of next year. However, it cautioned that OPEC+ members might be growing weary of the cuts, which have been in effect for over two years.
Future Risks:
The EIA noted, “Although we assess that OPEC+ producers will likely continue to limit production below recently announced targets in 2025, the potential for weakening commitment among OPEC+ producers to continue cutting production adds downside risk to oil prices.”
Coordination Among OPEC+ Leaders:
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman emphasized the importance of maintaining “close coordination” within the OPEC+ group during a recent phone call, as reported by the Kremlin.