Commodities

US Crude Production Will Set New Records Through 2025

  • US crude production will hit fresh records in 2024 and 2025, the Energy Information Administration said.
  • Crude output had already surged through 2023, helping keep oil prices lower.
  • Brent crude will average $82 a barrel this year, then dip to $79 in 2025, the EIA estimated.

US crude output is headed for new highs, the Energy Information Administration said on Tuesday, helping keep oil prices lower.

Production is expected to reach fresh records in the coming years, averaging 13.2 million barrels per day in 2024 and 13.4 million in 2025. That’s up from last year’s annual average of 12.92 million barrels per day, as weekly averages also shattered records.

Well efficiency improvements will be the key driver behind the rising trend, though crude outflow will expand more slowly as US rig counts decline, the EIA said. 

Still, these new highs should help cement the US’ new-found strength in oil markets, after American shale production surprised global investors with a blowout 2023.

By December, S&P Global estimated that the US had become history’s biggest crude producer, with export levels roughly equal to the total production of Saudi Arabia or Russia.

US supplies have also muted the impact of production cuts led by OPEC, which have limited crude flows to support higher prices. 

Oil production from the cartel and its allies is expected to remain weak. EIA estimated OPEC+ output will average 36.4 million barrels per day in 2024 and 37.2 million in 2025, below the pre-pandemic five-year average of 40.2 million.

Despite the cuts from OPEC+, EIA sees global production exceeding consumption by mid-2025, resulting in inventories rising, helped by supplies from non-OPEC states.

As OPEC’s curbs are offset by continued supply strength outside the group, the EIA forecasts Brent crude averaging $82 per barrel in 2024, steady compared to last year, with the benchmark dipping to $79 in 2025. 

“We generally expect the Brent crude oil price is more likely to decline than rise because we expect global oil production will more likely exceed our forecast than fall short of our forecast,” the report said. “The potential for prices to exceed our current forecast is largely related to unplanned production disruptions, a risk highlighted by the recently escalating tensions in the Red Sea.”

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