The previous record — 12.31 million bpd — was notched in 2019 before COVID-19 triggered a cut in production….reports Asian Lite News
US crude production will rise to record highs in 2024 and 2025, but will grow less than it did last year, the U.S. Energy Information Administration said on Tuesday.
In its Short-Term Energy Outlook, EIA projected US crude production will rise by 290,000 million barrels per day to 13.21 million bpd this year and reach 13.44 million bpd in 2025, as well efficiency offsets fewer active drilling rigs.
The previous record — 12.31 million bpd — was notched in 2019 before COVID-19 triggered a cut in production.
The growth in production in 2024 and 2025 is also forecast to be much smaller than the rise of 1.01 million bpd last year.
The EIA outlook was released as investors raise concerns about rising global supply. A Reuters survey on Friday found that oil output by the members of the Organization of the Petroleum Exporting Countries rose in December as increases in Angola, Iraq and Nigeria offset continuing cuts by Saudi Arabia and others in the wider OPEC+ alliance.
Saudi Arabia also cut the February official selling price of its flagship Arab Light crude to Asia to the lowest level in 27 months.
OPEC production will fall by 230,000 bpd to 31.96 million bpd in 2024 before edging up to 32.63 million bpd in 2025, EIA forecast.
Meanwhile, the agency raised its 2024 world oil demand growth forecast by 50,000 bpd from its previous estimate.
US petroleum and other liquid fuels consumption would rise by 200,000 bpd to 20.4 million bpd in 2024, it added.
The report also said US energy-related carbon dioxide emissions are expected to remain unchanged in 2024.
Carbon dioxide emissions will then decline by 1.6 percent in 2025, the EIA predicted.
Worries of rising supply and weak demand for light crude also pushed Saudi Arabia to cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months.
While US production is set to climb to new records in 2024 and 2025 due to well efficiencies, the growth is set to slow from the 1 million bpd growth in 2023 due to lower drilling activity.
Prices for global benchmark Brent crude is expected to average $82 per barrel in 2024 and $79 in 2025, close to the 2023 average of $82, EIA said.
“Although we expect OPEC+ to restrict production to prevent prices from falling, we still anticipate global production to exceed consumption by mid-2025 and therefore for petroleum inventories to increase,” the agency wrote in its report.
EIA cautioned that heightened tensions in the Middle East and attacks on ships in the Red Sea could disrupt trade flows and push up prices.
Oil prices climbed over 2% on Tuesday as the Middle East crisis and a Libyan supply outage pared the previous day’s heavy losses. Brent crude futures were trading around $77.91 a barrel, while U.S. West Texas Intermediate futures were trading at $72.72 a barrel.
On the demand side, the agency expects growth in global liquid fuels consumption to be 1.4 million bpd in 2024 and 1.2 million in 2025, lower than the 1.9 million bpd growth in 2023 due to a weaker Chinese economy, increasing vehicle fleet efficiency, and an end to pandemic recovery-related growth in 2023.
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