What are the prospects for production and oil prices in the US? – FocusEconomics

The US energy sector has been gaining momentum in recent years. In our latest review, we look at future US oil production and price projections.

US oil production has been falling steadily since the 1980s to about 5 million barrels per day by the mid-2000s due to a long period of low oil prices. But the sands have now changed: Thanks to the explosion of the shale industry, America’s oil production has risen to about 12 million barrels per day, turning the country into a net energy exporter for the first time in decades.

The future is bright. Our analysts’ consensus is that WTI crude prices will trade above $80/bbl over the next two years, well above producer break-even levels that range from $48 to $69/bbl for new wells. Together with the addition of pipelines, this should lead to a record production of 12.8 million barrels per day by 2024, according to the Energy Information Administration.

As a result, the US will consolidate its leadership as the world’s largest producer of crude oil; Our experts estimate that the next largest player, Saudi Arabia, will produce approximately 11 million barrels per day in 2024. This bodes well for exports and, most importantly, for energy security. Back in the early 1970s, the US economy, dependent on foreign energy, was hit hard by the OPEC oil embargo. Today, thanks to the revival of domestic energy production, a repetition of such a scenario is a distant prospect.

Information from our network of analysts

As for the forecast for oil prices this year, EIU said:

“Oil prices in 2023 will continue to be subject to multidirectional forces, although the EIU expects upward pressure to prevail overall. On the one hand, the sharp rise in oil and gas prices in 2021-2022 contributes to a sharp slowdown in energy demand in many OECD markets. Oil traders remain concerned about recession risks amid aggressive monetary tightening by OECD central banks. On the other hand, the changing political environment in China is now shifting from a major downside risk to demand and global price forecasts to a major upside risk – much will depend on how quickly the country’s economy reopens in 2023 and the severity of COVID-19 outbreaks. in China. first semester.”

In production in the USA EIA Analysts said:

“Our forecast for crude oil production in the Permian Basin is increased by 470,000 bpd to an average of 5.7 million bpd in 2023. The completion of the new gas pipelines will allow producers to transport more natural gas produced along with crude oil (associated natural gas ) to the market, removing potential restrictions on crude oil production. Producers are currently flaring some of the natural gas they produce. We forecast that GOM crude oil production will increase by 120,000 bpd in 2023, while production in other US regions (except Permian) will decline slightly. In 2024, we forecast that crude oil production in the Permian Basin will increase by 350,000 barrels per day.”

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