U.S. crude oil production this year will rise by slightly less than previously expected while demand will fall, the U.S. Energy Information Administration (EIA) said on Tuesday.
The EIA issued the new outlook after Saudi Arabia and Russia extended voluntary production cuts of 1.3 million barrels per day through December as demand concerns weigh.
U.S. crude oil production will rise to 12.9 million bpd in 2023, the agency said, compared with its previous estimate of 12.92 million bpd.
The EIA expects production cuts from the Organization of the Petroleum Exporting Countries and its allies led by Russia – known as OPEC+ – will remain in place through the end of 2024 and offset non-OPEC production growth.
The agency now expects spot prices of Brent crude oil will only average $83.99 a barrel this year, but will rise to an average of $93 a barrel in 2024.
U.S. total petroleum consumption is now expected to fall by 300,000 bpd to 20.1 million bpd this year, compared with an estimated gain of 100,000 bpd in the October forecast, after the agency revised down its 2022 estimate.
Looking ahead, the EIA expects U.S. gasoline consumption to decline by 1% in 2024, resulting in the lowest per capita gasoline consumption in two decades.
The agency said the rise of remote work in the United States, improvements in the fuel efficiency of the U.S. vehicle fleet, high gasoline prices, and persistently high inflation have reduced per capita gasoline demand.
(Reporting by Laura Sanicola and Arathy Somasekhar; Editing by Emelia Sithole-Matarise)