U.S. crude oil production will rise to 13.21 million barrels per day (bpd) in 2024 the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday, which lowered expectation for U.S. crude growth by 120,000 bpd.
The EIA projected that crude production will rise by 170,000 bpd this year; down from the previous forecasted rise of 290,000 bpd.
In December, U.S. crude oil production was estimated to have reached an all time high of 13.3 million bpd. Production notched an annual record of 13.21 million bpd in 2023.
U.S. crude oil production fell to 12.6 million bpd in January because of shut-ins related to cold weather, particularly in key oil producing states such as North Dakota, according to the EIA.
Production is expected to rise by 390,000 bpd to hit a new record or 13.49 bpd in 2025.
The agency forecast that monthly production will return to almost 13.3 million bpd in February of this year but then decrease slightly through the middle of 2024 and will not exceed the December 2023 record until February 2025.
U.S. total petroleum consumption is expected to rise by 200,000 bpd to 20.4 million bpd in 2024, and then by another 100,000 bpd to 20.5 million bpd in 2025, the EIA said.
Attacks on shipping vessels by Iranian-backed Houthi rebels in the crucial Red Sea shipping lane beginning last year have disrupted shipping in the Suez Canal, the fastest sea route between Asia and Europe that sees nearly 12% of the global oil trade.
Global oil inventories are believed to have increased by 800,000 bpd on average from October 2023, the month before the Red Sea attacks began, through January 2024 and by an average of 700,000 bpd for all of 2023, the EIA said.
The EIA expects crude oil prices will rise into the mid-$80 dollar per barrel range in the coming months, but will experience downward price pressure in the second quarter of this year as global oil inventories increase.
(Reporting by Laura Sanicola; Editing by David Gregorio)