US Crude Oil Production Growth To Slow Sharply In 2024
In a significant shift from the rapid expansion seen in the previous year, US crude oil production growth is set to decelerate markedly in 2024, according to a recent report from the Energy Information Administration (EIA). Following a record-breaking output in December, the US crude oil production is anticipated to experience a downturn until 2025.
The EIA’s report, released on Tuesday, highlights that US oil output will see a modest increase of only 160,000 barrels per day (bpd) this year, starkly contrasting the 1.02 million bpd surge witnessed in 2023. This slowdown suggests that the unprecedented December outflows, which exceeded 13.3 million bpd, will be matched in February 2025. Production has already faced a setback, dropping to 12.6 million bpd in January due to severe weather conditions that disrupted operations.
Despite the anticipated rebound to near-record levels this month, the EIA forecasts a gradual decline in output throughout the remainder of 2024, with an average annual production expected to reach 13.21 million bpd. However, a resurgence in growth is projected for 2025, with output potentially climbing to 13.49 million bpd.
This downturn in production growth dampens the momentum of the US oil industry, which, in 2023, established itself as the largest crude producer in history. The surge in US production last year played a critical role in counterbalancing the production cuts implemented by OPEC, which were aimed at reducing the global oil supply.
Amidst this backdrop, the global oil market is still projected to face a 120,000 bpd deficit in 2024. The EIA expects a modest increase in oil prices, fueled by ongoing uncertainties, including the impact of attacks in the Red Sea region. Brent crude prices are forecasted to hover in the mid-$80 per barrel range in the upcoming months, with a potential rise driven by further supply disruptions in the Middle East.
The EIA report also suggests some relief in price pressures could emerge from an anticipated increase in global oil inventories in the second quarter. However, the agency cautions that the risk of supply disruptions in the Middle East remains a significant factor that could lead to higher-than-expected crude oil prices.
As the US oil industry navigates this period of slowed growth and the global market contends with ongoing uncertainties, the outlook for crude oil prices and production remains closely watched by industry stakeholders and policymakers alike.
Also Read: California Storm Causes Flooding, Mudslides, And Power Outages