US oil production is on a surge and is anticipated to outpace earlier projections made this year, as revealed in the latest report by the US Energy Information Administration (EIA).
The driving factors behind this surge? Robust well productivity combined with climbing crude prices. While 2022’s average stood at 11.9 million barrels a day, 2023 is set to mark a record, boasting production of 12.8 million barrels a day, marking a substantial hike from the previously estimated 12.6 million.
But why is this uptick significant? The international oil market finds itself in a tight spot, primarily due to the production slashes by OPEC and its allies, who aim to stabilize prices. Notably, Saudi Arabia— the helm of the cartel, has prolonged its hefty 1 million barrel per day cut, leading its production to dip to a historic low.
However, this isn’t the finale: both US and global production are poised to soar even higher in 2024. The EIA projects a global oil output of 103 million barrels a day in 2024, marking an increase of 1.7 million barrels daily from 2023. But, what’s really startling is that a whopping 70% of that increase is anticipated to hail from non-OPEC nations with the US, Brazil, Canada, Guyana, and Norway at the forefront. The US alone is gearing up to achieve 13.1 million barrels a day.
The consumption part, though, is a different story. The demand for refined products seems to be waning, with analysts now forecasting the US will consume 4% less jet fuel in Q3 as the air travel frenzy starts decelerating— even gasoline and diesel intakes are projected to dip for both Q3 and the entire year. However, in a twist, the overall US oil demand is set to rise, thanks to the surging consumption of natural gas liquids.
Information for this story was found via the EIA. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
