U.S. crude production will rise in 2023 even as demand flattens, the U.S. Energy Information Administration (EIA) said on Tuesday in its Short Term Energy Outlook.
EIA’s latest forecast calls for crude oil production to rise by 590,000 barrels per day, to 12.49 million barrels per day (bpd) in 2023, and by another 160,000 barrels to 12.65 million bpd next year.
The gains still mark a slowdown in volume growth, which has been constrained by rising costs, dwindling reserves and pressures from investors on producers to hold down their spending.
U.S. petroleum and other liquid fuels consumption will stay flat at 20.3 million bpd this year, the EIA said, while forecasting U.S. economy would contract slightly in the first six months.
Globally, demand in China would increase by 700,000 bpd this year and by 400,000 bpd in 2024, as the country pivots away from a zero-COVID strategy, the EIA said.
The agency also forecast Russian production of petroleum and other liquids would decline by about 1 million to 9.9 million bpd in 2023. However, that number was 400,000 bpd higher than January’s forecast as Russia’s exports have remained higher than previously expected, it said.
Brent crude oil prices will decline in the second half of the year to about $82 per barrel from $85 per barrel in the first half as global oil production outpaces demand and leads to inventory builds, EIA added. (Reporting by Arathy Somasekhar and Laila Kearney; Editing by Chizu Nomiyama and Tomasz Janowski)